Raising the income of staff to offset the staff’s higher benefit costs will bankrupt the City of Santa Clara. This is due to the long term unfunded pension costs associated with higher incomes compared to the relatively short term medical costs associated with the same employees (i.e. the City will pay retired employees until they die but the City will only pay for the employees’ medical benefits until which time the employees retire and these figures will diverge more as people live longer). Therefore, those the City has recently hired or promoted into key management positions are going to personally benefit at the expense of the City. The question is, how much are they going to personally contribute to the City over the course of their careers and will that offset their true long terms costs? Time will tell.
Something that was not addressed in this piece are some of the lesser known benefits afforded to key public sector leaders. Those include 0% home loans, vehicle allowances, and other benefits not afforded to line staff and benefits that are not often spoken about.
Lastly, it is not the higher incomes or larger benefit packages that should alarm the residents of Santa Clara. It is the fact that a disproportionate number of the City’s recent recipients of higher incomes and larger benefit packages are former associates of the current City Manager. I say this because I find it hard to believe that in a region with roughly 10 million people, the current City Manager already knew the best of the best and they were all poised to make the move to the City of Santa Clara.