City continues to pay high salaries as it struggles with budget overruns
■ By Melissa Diaz Hernandez / Editor
As the city of Hemet continues its struggle to produce a balanced budget, the council unanimously entered into an agreement Jan. 9 with new City Manager Allen Parker, who will earn $200,000 per year. Parker’s predecessor, Alex Meyerhoff, earned the same salary and perks now granted to Parker. Both city managers signed five-year agreements.
Meyerhoff was hired in December 2015 and resigned from the position in August 2017 to take the city manager’s position for the city of San Fernando, perpetuating the revolving door of key city employees, particularly city managers.
How does this salary compare to those living and paying taxes in Hemet? The city of Hemet has a poverty level of 24.4 percent and an annual median income of $35,609, according to the United States Census Bureau. Parker and Meyerhoff’s salaries are more than five times Hemet’s median household income.
As the city continues to pay management salaries that far exceed the median income, it simultaneously runs a deficit year after year. Last December, Finance Director Lorena Rocha presented council an update on the FY 16/17 budget. You could hear a pin drop on the carpeted floor of the council chamber when Rocha told council that it would need to take money out of reserves to cover the costs of the FY 16/17 budget.
The Valley Chronicle reported last December on the city’s overruns and reasons for them. The explanation came from Parker, who said: “Yes, the mayor [then-Mayor Linda Krupa] was correct in stating that the general fund is projected to have a $2 million deficit by June 30, 2018; and yes, the deficit will be erased by using funds set aside in the city’s 20 percent reserve fund, which is currently at $8 million. The deficit arose because the decision was made to fund public safety raises–annually, $2 million–from the general fund rather than Measure U funds.”
Will the council be left to use Measure U funds—the 1 percent tax sold to the public ostensibly to pay for “more boots on the ground”—to balance the budget? Or will it possibly need to use some of the funds to take over SR-74/Florida Avenue from Caltrans? Allocation of the money for public safety uses exclusively was by non-binding resolution, so legally it can be used for anything the council wants to spend it on.
What does Parker’s agreement entail?
“Parker has been serving as the City’s Interim City Manager for the past several months,” stated the staff report. “At its meeting on Dec. 12, 2017, the City Council performed an Employment Agreement for Parker as the city’s permanent city manager.” The agreement signed on Jan. 9 will supersede the prior agreement Parker entered into as the interim city manager.
The new agreement includes the following:
Employment is for the nominal term of 5 years, subject to early termination. Parker is an “at-will” employee with a base salary of $200,000 per year.
The city will maintain a 10 percent separation in base salary between Parker’s base salary and the next highest city employee’s base salary.
Parker is to receive any cost of living adjustment to salary granted by the council to all city employees or a majority of recognized collective bargaining groups. This is not retroactive.
Parker is eligible for merit increases and performance bonuses at council’s discretion based on his performance evaluation.
The city will contribute an amount equal to 2 percent of Parker’s base salary into a city-provided deferred compensation program. Parker will receive the same benefits and leave as other department heads.
Parker will be enrolled in CalPERS under the 2 percent at 62 formula for PEPRA employees and will be required to pay 50 percent of the normal costs of the retirement, as provided under state law.
Parker will receive a $500 per month automobile allowance for use of his personal vehicle for city business.
The city may terminate the agreement either for-cause or not-for-cause. In the event of a not-for-cause termination, Parker will be entitled to 30 days’ notice and six month’s severance (based on his then base salary).
Parker is subject to an annual review by the Hemet City Council. “Review and evaluation shall be in accordance with such criteria as the parties may jointly agree upon, but which the parties contemplate will include mutually agreed upon-performance goals for the city manager and city council defined goals, priorities, activities, and programs for the city organization. Failure of the city to provide a performance evaluation shall not limit the city’s ability to terminate this agreement pursuant to Section 5 [Termination].”
What does the future hold?
Parker has already tried to nail down a date for a strategic planning session in February. Meyerhoff fell under intense scrutiny when he was unable to bring forward a strategic plan to the city council.
Between instability in city management and a recurring deficit, Parker has quite a task ahead of him. Will the people of Hemet get their $200,000 per year worth of much needed improvements?