The city of Irvine enjoyed an uptick in sales tax revenue and added revenue from hotel taxes this year that accounted for an increase in revenue of $14.4 million in an unanticipated surplus for the most recent fiscal year. The city council majority voted last week to extend a small portion of this unanticipated revenue in the form of bonuses to all city employees (no bonuses for council members) in amounts of $100 to $500 depending on employee’s job status (full time versus part-time with part-time bonuses allocated based on the number of hours worked weekly).
The move was opposed by Council members Steven Choi and Jeff Lalloway. And it has to be very hard for these men to walk the corridors of Irvine City Hall with employees knowing that they voted against what amounts to a small Christmas bonus that most employees will likely put right back into the local economy.
Republicans routinely suggest that government needs to run like a business; the phrase takes on an almost zombie-like approach. But don’t smart businesses seek to grow and expand? Don’t businesses seek to turn a profit? Don’t businesses often pay their senior management astronomical compensation packages of salary, bonuses and stock? And don’t smart businesses reward employees for a job well done when they can?
It’s been a tough economy for everyone these past few years. Irvine’s headcount is lower by about 70 employees who have left or retired this year. These positions were not replaced. Tere were no layoffs and no city services were cut all the while, Irvine’s population continues to grow. So as we pointed out before, Irvine has significantly more people who are residents today than in 2000 when the Republicans were last in the majority. And while the number of city employees has expanded since then, there are fewer city employees per resident today than there were 11 years ago with no cuts in services (actually several notable expansions).
From the Daily Pilot story:
The council awarded $500 to each full-time employee, $250 to part-time employees with more than 10 hours per week on the clock, and $100 to part-time employees who worked less than 10 hours per week.
“It’s not a lot of money, but it says to every employee, ‘We recognize that we’ve been through a tough time together,'” Councilman Larry Agran said. “It is not a bonus; it is recognition of the tough times, the harder work, the smarter work, that has allowed us to restore ourselves to a position of being whole.”
“It is very difficult to sit in front of our city employees and to object to that type of recommendation as a bonus compensation [for] a good job well done,” Choi said at the Tuesday meeting. “But for me, I’d rather be more cautious than celebrating with the temporary surplus.”
That surplus is the not-yet-allocated $454,691 of a nearly $14.4-million surplus in the general fund year-end report.
The unexpected funds in part came from a 15% increase in sales tax revenue and a 14% increase in hotel tax revenue, according to a staff presentation.
Lalloway suggested that the money be added to the city’s insurance fund, or to its contingency reserve fund, which the city targets to match 15% of the general fund.
“I think it sets a rather poor precedent to give away taxpayer money when so many in the nation are struggling right now,” Lalloway said Thursday.
Now both Choi and Lalloway operate small businesses in the city. I have to wonder – do either of them ever give their employees a raise? A bonus? Or do they operate their business on the premise, “you’re lucky you have a job in this tough economy.”
The bonuses allocated to Irvine city employees is a one-time expense to people who work hard and earn every penny. Many are middle class and will likely use the bonuses at local stores for holiday shopping. And the city council will be placing more than $13.8 million into other uses, so carving a small slice of unexpected revenue to reward employees is hardly an irresponsible use of funds.
But back to the notion that “government needs to run like a business” for a moment: “Businesses exist to be profitbable. If they don’t make money, they are out of business. They provide goods and services to others when they can make money at it and price these goods and services to make a profit; at times, the costs of salaries is factored in to the price of goods and services (which is why you pay more for Heinz ketchup in the stores than the store brand which costs less but tastes exactly the same). Governments provide goods and services for the public—things that voters and taxpayers have decided are people’s right to possess and serve the greater community. Government in inherently an unprofitable enterprise (does government profit from War? If it does, should it? Does government profit by running prisons? Does government profit from issuing proclaimations?).
Irvine Republicans loudly complained when the city council majority approved a small measure in increase the minimum wage for work paid for by the city to $10 an hour. The sky hasn’t fallen. Irvine’s balance sheet remains one of the strongest and best of all municipalities in Orange County. Our city workers — only 22 percent make six figures compared to the more than 50 percent in nearby Santa Ana — deliver outstanding performance ever day.
It’s time for Republican politicians in general, and Republican Irvine city council members in particular, to start recognizing that “running Government like a business” is antithical to their core beliefs.
Or, maybe the Irvine City Council could have said, “Gosh, we got some extra money in the coffers this month. Maybe we should put it away for a rainy day.” Do you think? If I were Lalloway or Choi, I would be walking the halls of Irvine with my head held up high, knowing I voted the right way.
The story calls these bonuses inconsequential. How so? This is thousands of dollars out of the pockets of the taxpayer who is looking at every dime spent.
You are right about one thing. Government should not be run like a business. But, businesses are created in part to take risk for profit. Government should not be taking any risk at all. It should be good stewards of the taxpayer dollar. In this case, the council majority failed.
keepdapeace:
I guess you missed the part where millions of dollars were put into the rainy day fund. I am not surprised, “accidental” omissions of fact like that are typical of men of your ilk. For a better definition of men of your ilk refer to the council majority in Costa Mesa- “businessmen” who also think they know more than everyone else.
Dan, way to call this whole run government like a business movement on its own b.s. Nice commentary.
Men of my ilk? Ooohh. That hurt. Since I doubt you know anything about me, you shouldn’t throw comments like that around. Just because I don’t fall into lockstep with the democratic majority, I am a man of…. ilk?
I read the part about the reserves. That is no excuse, in time like this, to spend money that should not be spent. I am surprised, of course, that the council majority didn’t just hand out a blanket raise to everyone.
Maybe you should go have another beer.
The gap between the haves in the public sector and have-nots in the private sector widens! Now, our humble civil servants not only get guaranteed employment, easy work hours, tons of vacation and PT, a great salary, guaranteed pension at an early age, you also get a bonus.
What a JOKE!
Wake up and smell the coffee conservatives. It is an election year and the Agranistas know the City employees are dumb enough to forget about the past years of take aways, in return for a few pieces of silver. The next apple on a string the Agranistas will dangle before employees is a return of their “merit pay,” which was arbitrarily stolen several years ago.
Remember that King Larry does nothing out of the goodness of his heart and while not up for election in 2012, will want to make sure his slate is backed by the employees. Funny thing is, the employee groups including the Cops, are so lacking in backbone, they will forget the past, kiss and make up with the Agranistas. Boy have the times ever changed at Irvine City Hall.
Dan, your buddies, the Agranistas couldn’t run a corner lemonade stand, much less government as a business. The issue is, that they are running government in Irvine just like the fools in Congress from both parties are running it at the national level.
Your local Council business experts have burned their way through 200 million tax dollars at the Great Park and have nothing to show for it. They have also used most of the Reserve for Economic Uncertainty to continue wasteful City projects like the “Agran Shuttle to Nowhere,” now recently expanded to the “Agran Shuttle to Everywhere.” Yesterday I saw three of the shuttles cruising around the Spectrum area and not one of them had as much as one passenger on it. Yep, that meets the best business practice standard in anyone’s book?
If the economy continues on it’s present course, in another year, Irvine may well be facing exactly the same financial problems the Federal government has today. Bottom line is, “You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time.” (PT Barnum)
This is really pretty poor taste to tout something like this. I agree with Phil on this one. Too many citizens suffering in the private sector to express this as a positive occurance.
Pat — when was the last time you went to the Great Park. It’s got a ways to go but the notion there’s nothing to show for it is wrong.
Henry – I disagree; this is exaclty how a business runs. If you don’t hire people to replace those who leave, other employees pick up the slack and do more with less. When more money comes in, a small amount of that is paids as a bonus to those who did the work.
Pat – I know its hard for you to swallow, the successes of Irvine’s Democratic council majority. Voter registration is this town is just about even.
dan,
I dont disagree with your position on being generous in good times. Im simply stating that it is in bad toaste to tout this in these times when everyone else who doesnt work for a g9overnment agency is tightening their belts while being on the hook to pay for bonuses to cityemployees who are enjoying all the benefits of premium employment conditions.
Henry — I don’t believe you live in Irvine, so none of this concerns you.
(I’ve actually been waiting to use that oen for awhile 😉 hahah)
I disagree; being a city employee in Irvine is no different than being an employee anywhere else. You are judged on performance.
Well, we will have to respectfully disagree. City employees are not subject to the same consequences of poor performance as private sector workers. But my real objection is touting the bonuses at this time. Just poor taste and bad timing.
Henry — you don’t know what you’re talking about. Poor performing employees face consequences in Irvine like they do at private companies. And I disagree about highlighting the bonuses. What better excuse to show how the city is managing its workforce effectively.
Well dan, I would not do that. Its just a sense of my values. If Im doing well its ok. but when so many around me are not by not mch fault of their own, I would not be crowing about my fortune. Just saying.
It’s a modest bonus paid each employee. Geez.