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Premium pay nets city workers millions in bonuses for just doing their jobs 

Wednesday, Jan 26 2011
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Supervisor Carmen Chu, who sat on the committee at the time with Eric Mar and then-Supervisor Sophie Maxwell, interjected. "Just a question," Chu said. "With regard to the premium pay practices, what exactly do you mean by that?"

The comment said a lot about public awareness of the issue. As cities and states across the country have convulsed with the economic downturn that began in 2007, the subject of public employees' wages and benefits — one of the largest drains on tax dollars at every level of government — has gotten a lot of attention. At the local level, the debate over city workers' compensation crested with Proposition B, a municipal ballot initiative that would have modestly increased employees' contributions to their own health care and retirement plans. It was not supported by a single elected official in San Francisco with the exception of Public Defender Jeff Adachi, its author, and went down to defeat in November by a whopping 16-point margin.

Yet premium pay, despite the tens of millions it costs the city every year, has never inspired heated debate. One reason is that premiums are an obscure provision of labor contracts. When city negotiators announce, for instance, that workers in a given union will receive a 3 percent raise, that number doesn't include premium payments. Unions themselves have little to gain from advertising the extent of the bonuses they enjoy, and their cost isn't tallied in any kind of format that's easily accessible.

Another reason is that premium pay is an unusually complex subject. Unlike the obvious advantages many government workers enjoy over their private-sector counterparts when it comes to benefits or even wages — the San Francisco Chronicle reported in April that one in three city employees earns a six-figure salary — premium pay doesn't lend itself to pat vilifications of the public sector.

Some premiums appear justified, others don't. The problem is that the city seems to have lost track of which are which.

"To draw an absolute line, I think, would be irresponsible," Supervisor Sean Elsbernd, the board's foremost budget hawk, says of premium pay. "Are there inefficiencies? I have no doubt."

Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association, a nonprofit, nonpartisan urban-studies think tank, says the opacity of the question is all the more reason for taking a close look at it. "From a good government perspective, the main problem with abusing premium pay is that it prevents transparency. It means that the citizens cannot understand in a straightforward way what civil servants are being paid," he says. "There are some cases where premium pay is justified — if you need to get someone to work a graveyard shift or something like that. But it's clear that it's being abused now."

San Francisco's politics is heavily influenced by the interests of organized labor, and given unions' heft at City Hall, it comes as little surprise that the Board of Supervisors has been loath to delve into premium pay. Campbell faced an uphill battle before the Government Audit and Oversight Committee. In one of several meetings, some members appeared to suggest that the purpose of the proposed audit should be to create more premiums for city employees, rather than scaling back the ones that already exist.

"If one bargaining unit gets good incentives and flexibility [with its premiums], perhaps that could be extended to other bargaining units," Mar said.

"If the goal is to incentivize or to make things better, I'm all for that," said Maxwell, a former electrician. However, she added that she had a "concern" about the audit "if the goal is to find out who's doing something wrong."

In the end, the supervisors approved an audit that, Campbell tells SF Weekly, is "much narrower" than what was originally suggested. Auditors will now focus exclusively on two types of premium pay suspected of being particularly prone to abuse — standby pay and lead pay, a leadership bonus that workers can earn for working in groups of their peers that are as small as two people — the "leader" and someone else. With the notable exception of police officers' standby pay, however, neither of these is among the largest sources of premium pay for city employees.

In other words, the audit approved by supervisors will probably not address the most fundamental questions about premium pay — why it exists, whether it's fair, and how much it has grown over time. Yet a review of premium-pay figures obtained by SF Weekly, as well as of archived union contracts dating back to the beginning of the city's current negotiating process in 1993, points toward some interesting — and unexpected — answers to those questions. It turns out that these lucrative bonuses have a more idiosyncratic history than you'd think.


The first thing that's clear from a review of the city's bonus figures is that not all workers benefit to the same extent. Some departments and unions have agreed on more and higher premium payments than others. Near the top of the list are the police department, which logged $15.5 million in premiums during fiscal 2010, and the Department of Public Health, with $8.5 million. Most police premium pay comes from standby time or off-hour shifts, while much of the Public Health money comes in the form of standby pay for nurses and doctors, as well as a 5 percent premium for "charge" nurses who temporarily assume leadership of a ward.

Yet it is the fire department, more than any other city agency, that stands out for the number and size of its premium payments. In 2010, firefighters earned $20.4 million in bonuses — more than 30 percent of the premiums paid out in the city, though they make up only 5 percent of San Francisco's 27,000-strong government workforce. Eight of the top 10 most costly forms of premium pay are those involving the fire department.

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Peter Jamison

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