There is peace in Morro Bay-land today, after the City and all of its employee unions reached salary contract agreements and all at the same time, eliminating the normal dance of each union coming to agreements in turn, and with none holding out for a better deal.

City Manager Scott Collins’ staff report covers agreements with the Morro Bay Peace Officers Association; the Service Employees International Union Local 620 (SEIU); the Morro Bay Firefighters Association IAFF Local 3725; the unrepresented, Confidential Employees of the City of Morro Bay; the unrepresented Management Employees; and the various Department Heads. Even the City Manager has a new contract.

Everyone will get a 5% cost of living adjustment (COLA) and be reimbursed for some of the 5% pay cuts they all took last May (through Dec. 31, 2020) to help the City through the dark COVID budget days, when the shuttering of much of the economy to fight the spread of the coronavirus, put the City’s revenues in serious doubt.

But last fiscal year wasn’t so bad, as that summer’s tourism was actually pretty good despite the Governor’s orders to stay home. And this next budget is balanced with a small surplus, and with relief monies expected to come from the federal government of nearly $1 million this year and next the reserves should be replenished without trouble.

The voters, last November, also passed Measure E-20, a 1% local sales tax that should bring in $2 million more a year; and there are also now two marijuana stores open and collection of a 5% cannabis tax has begun that could bring in nearly $500,000 more a year.
So these modest raises wouldn’t seem to put much of a drag on the City’s finances.

“Total cost to the City in the Fiscal Year 2021/22 (FY 2021/22),” Collins said, “is approximately $660,460, with $520,565 in salaries and benefits, plus $78,000 for potential lump sum payments, contingent upon the City meeting specified financial terms and conditions as defined in the agreements. These amounts have already been included in the proposed FY 2021/22 budget.”
That budget, the largest in town history, has also now been approved.

Individually, the SEIU got the biggest amount at $184,000 in the 5% COLA, and would also split $41,000 lump sum (between 41 employees), for a total of $252,000. (This total includes a special $26,000 lump sum payment to members of the harbor department.)

Next highest was the police department at $99,000 in salary and benefits, and $15,000 lump sum (split 15 ways) for a total of $149,000.
Managers and confidential employees were third at $88,000 salaries and $10,000 lump sum (10 ways), for a total of $98,000.
The fire department was fourth with $78,000 in pay and $6,000 lump sum (split 12 ways — $500 each), for a total of $84,000.
The fire department’s lump sums are lower because they were late to the pandemic cuts, as they didn’t have a contract for much of the year and so didn’t give up as much pay as others. The firefighters cut their pay 5% from October 2020 to Dec. 31, 2020.
Firefighters and police were also essential workers and didn’t lose any people to budget cuts either. Indeed, the City Council spent $1 million of reserves to ensure the fire and police departments were fully funded.

Directors, of which there are five, got $56,000 in salary/benefits and will split $5,000 for a total of $61,000.
And the city manager is in a category by himself; getting $12,000 COLA and $1,000.
A 2016-17 City Council goal said the public is best served by, “attracting and retaining experienced, talented, and well-trained staff,” Collins’ report said, and minimizing turnover, “to the greatest extent possible.”

The City hired a salary and benefits consultant who presented his report in December 2016 and concluded that in the jobs that were easily compared to those in other cities, Morro Bay was from 5% to 25% below the median.
“As a result,” Collins said, “the Council at the time expressed a desire to compensate employees in a manner that attracts and retains high quality staff within the financial means of the City.”

The City has reportedly addressed many of these short-pays but has not gotten to others, which have in turn fallen further behind, especially in the harbor department.

The SEIU’s old contract called for “negotiations to discuss an equity adjustment of job classifications including Harbor Patrol Officer, Harbor Patrol Supervisor and Harbor Business Coordinator. While difficult to find comparable agencies in terms of both duties and the agency’s ability to pay, an internal salary comparison conducted in 2019 showed Morro Bay to be 18%-21% below other harbors.”

So in the SEIU contract there’s an additional $26,000 in “5% Harbor Equity Adjustments” bringing the SEUI’s overall total of $225,000 for every SEIU member, to $252,000 including the harbor department’s back pay.

And while the City employees usually get a COLA every year, they got none in 2020 and from 2017-2019 got 2% each year; coupled with the 5% now, the overall COLA increases have been 11% since 2017.

The lump sum payments come with a catch — two conditions must be met:
• The three major tax revenues — property, sales and bed taxes — must “meet or exceed the combined Fiscal Year 2020/21 forecasted amount of $7,757,301 adopted by Council on June 23, 2020” (this doesn’t count Measure Q, M-E or the cannabis tax); and,
• The City doesn’t get any state or federal — or from any other external sources — unfunded mandates “that require significant unplanned and/or un-forecasted General Fund expenditure(s) of more than $125,000 above the projected use of General Fund unassigned reserves equal to $1,248,000 in the Adopted FY 2020-21 budget.”

The new employee contracts are for just one year, expiring on June 30, 2022. This is normal as the City has only once reached a multi-year contract with its employees and that was over 10 years ago.