Bonus payouts to Burbank employees total $4M
Documents show the city has paid out $4 million collectively since July 2007.
Burbank City Hall. (File photo)
A Los Angeles County Superior Court judge in May ordered city officials to release bonus pay amounts for individual employees to the Burbank Leader, which sued to obtain the information after its public records request was denied under the auspice that it would harm employee morale and violate workplace privacy rules.
On Thursday, City Council members noted that they had suspended bonuses for mostly executive-level employees for the coming fiscal year, given a budget in which library upgrades were put off, fire services were reduced and fees were raised.
“As a result of that, we are returning that money to city services which is important,” said Councilwoman Emily Gabel-Luddy said. “Frankly, it was a very important step to take. Actually, it was critical. And we took it.”
But the majority of employees who received bonuses this past year will continue to be eligible because the pay outs are written into their union contracts. The City Council would have to renegotiate those terms to completely suspend the system.
The records released by city officials reveal a work culture built around that bonus system, which for some employees has amounted to tens of thousands of dollars in the past four years alone.
Burbank Water and Power General Manager Ron Davis pulled in $79,000 in bonus pay during the four-year period, putting him at the top of the list. Davis’ total salary in 2010 was $263,028.
Public Works Director Bonnie Teaford, who made $207,176 last year, was paid $55,000 in bonuses during the past four years. The directors of Management Services, Information Technology and Library Services each accumulated between $31,500 and $40,000 in bonus pay during the same period, according to the records.
City executives have defended the bonuses as an important tool in retaining top talent, but records show that the annual payouts extend to hundreds of employees, many of them rank-and-file, each year. Over time, the bonuses — which range from $30 to $22,000 at a time — can accumulate and add significantly to their salaries, and the city’s pension obligations.
A $7-million increase in pension costs was singled out as the main contributor to Burbank’s $8.7-million budget gap for this fiscal year.
In fiscal year 2009-10 alone, the city doled out $1.16 million in bonuses for 527 city employees, or about 43% of the of 1,214 eligible workers. One hundred employees earned $10,000 or more in bonuses during the four-year period.
The data also shows that 19% of those who received a bonus did so four years in a row.
“Most of your top performers will continue to be your top performers each year, typically, unless something drastic [occurs],” said Management Services Director Judie Wilke, who earned a $12,000-bonus this year. “If you are a competent employee, you remain so.”
Even as tax revenues have been hit by the recession, the cumulative amount of bonus pay has increased. In fiscal year 2007-08, the city distributed $1.07 million. In 2008-09, that amount increased to $1.11 million, and then to $1.16 million in 2009-10 as the City Council continued to expand the program for some unions.
To earn a bonus, employees must meet specific goals and objectives established at the start of the fiscal year, although oversight of how they’re divvied up varies by department and depends on the management structure, officials said.
“We trust the department directors to review what’s brought to their desks,” said city spokesman Keith Sterling, who earned a $5,500 bonus this year.
Approval of a bonus may pass through three people before reaching a department chief. Amounts can be a percentage of a salary — such as the $123.71 listed for a Park, Recreation and Community Services employee — or a flat figure, like the $5,000 awarded to a city attorney.
City Manager Mike Flad, whose contract does not allow for a bonus, approves merit payments for executives.
Burbank’s employee bonus program dwarfs its counterpart in Glendale, a city nearly twice as large where only executives are eligible for the payouts.
Glendale, which suspended bonuses in 2008 due to mounting budget problems, distributed $1 million during a 10-year period to its upper management. The highest payout — $10,765.20 in 2007 — went to disgraced former Police Chief Randy Adams, who is now embroiled in a corruption scandal in the city of Bell. It was one of only three individual payouts of more than $10,000 since 1999 in that city.
But Burbank officials argue an “apples to apples comparison” isn’t possible with Glendale.
Former Burbank City Manager Mary Alvord, who teaches a management training course at Woodbury University for Glendale and Burbank employees, said the bonuses were an important tool to reward those “who work their butts off for the city.”
She cautioned that workplace morale would suffer after the Burbank disclosure because she saw it happen among Glendale employees after bonus pay figures there were made public.
Still, she said, “I agree it should be out there. You are paid by taxpayers’ money. As a taxpayer, you have the right to know. And you can’t play hide-and-seek with that.”
Melanie Hicken contributed to this report.