HomeMy WebLinkAboutCorrespondence - #25 Middleton, Samuel
From: Victor D Mendez <
Sent: Friday, June 16, 2023 3:13 PM
To: eComment
Subject: Agenda Item #25 - MOU with Santa Ana POA
I am pleased to see that the City, after months of acrimonious negotiations, has reached
a new, modified agreement with the POA.
The proposed agreement appears fair and fiscally balanced to all parties and hopefully
brings about labor peace that I have long advocated for.
I spoke with Gerry Serrano to express my full support for this proposal and with the
hope that the City can focus on the most critical needs of its police department and
move forward with restoring it current staffing shortage, as well as continue to place
modern methods and practices to ensure accountability of the City Manager, Chief, his
command staff, and all other officers in its duty to serve and protect.
After reviewing the report, a few high-level concerns came to my attention and wish to
outline them for your consideration.
1. There is a lack of transparency as the new proposed expense is not very detailed.
The citizen who reads the report cannot determine where the money went (Salary
increases, one-time payment of $2,000, etc.)
2. It is important that the Council recognize the POA gave the City savings by
agreeing to not have the one-time $2,000 payment be treated as "pensionable."
3. This pension indicated savings is about $65,000 - $130,000. The exact
amount depends on the City's contribution to each individual member of the POA
and how the rules for CalPers contributions are applied.
4. A more exact figure can be determined by City Staff.
5. The additional $117,000 proposed to adjust salaries for the Police Chief's
command structure is not the fault of the POA. The City Manager had an
opportunity to negotiate the subject language out of the Police Management MOU,
but that did not occur.
6. While it is important to understand the totality of the fiscal impact of the Proposed
MOU, the POA cannot be held responsible for the negotiations between the City
Manager and the Police Management Association.
7. The report clearly states that the POA's fulltime release position is being paid
through the members' donation of their floating holiday.
8. The floating holiday is compensation and as such the Full-time release is paid by
the members not the City.
9. Any argument to the contrary is illusory and is akin to stating that the City pays
the mortgage of the City Manager.
10. Lastly, the $2,000 one-time lump sum payment comes out to about
$1,000,000.
11. The budgetary treatment of the lump sum payment is debatable.
12. First, had the City Manager been able to come to agreement much earlier
with the POA, all the funds for the lump sum payment most likely would have
applied to FY 22-23. Instead, the Council must now evaluate options down the
road to identify areas to offset this and other deficits.
13. One area to fund the lump sum payment would be the debt
stabilization fund, which takes the general fund projected balance from the current
year off the top before funds are allocated for the next year's budget. The fund
operates with no transparency and in FY 22-23, the contribution from the prior
year more than doubled. Total contributions to date are about $22,000,000.
14. Another consideration is to record the lump sum payment expense in FY 22-
23 and using debt stabilization fund balance as an offset.
15. Second, The MOU covers 1/1/23 to 12/31/23: therefore, depending on what
the intention of this lump sum payment (i.e. to cover retroactive pay from 1/1/23-
6/30/23) can help determine how feasible this can be.
16. The process is feasible under the rules for government accounting whereby
the expenses are recognized when the liability is incurred, if measurable. The one-
time payment is measurable and upon approval by Council can be considered
incurred before 6/30/23. (Ref: Fund Accounting Theory and Practice. Lynn and
Freeman, 2nd Ed, Page 35)
17. Unless there is some valid, well- documented reason to record the expense
in FY 23-24, the lump sum payment belongs in FY 22-23 and avoids a deficit.
I hope this helps.
VICTOR D MENDEZ
WARD 3
SANTA ANA, CA 92705
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