FREMONT — Raises are in store for almost every city employee in Fremont, even though the city is still leaning on more than $20 million in federal pandemic recovery funds to patch holes in its budget in the coming years.
The pay increases mean Fremont might have to pull back some planned additions to its workforce, such as two more police officers and nine positions in the fire department to staff a new fire truck company.
The city’s 187 police officers and sergeants and 133 firefighters and battalion chiefs are getting the biggest paycheck increases of 17% spread out over this year, retroactive to July 1, and the coming two fiscal years. Most other city employees will see 14% raises over that time period, according to city reports.
As of March, before the raises took effect, a first-year Fremont police officer was earning a base salary of nearly $111,000, with step increases up to nearly $135,000. Some of the longest-tenured officers could earn up to $153,000 in base pay. A new police sergeant was earning $133,000 annually, with steps up to nearly $162,000, according to city pay schedules.
In March 2022, new firefighters were starting out with just under $99,000 in base pay annually, with steps up to about $120,000. New battalion chiefs start at $150,000 and step up to almost $183,000.
The City Council approved the raises earlier this month, along with 5% one-time raises for the city manager and city attorney. With the raise, City Manager Karena Shackelford now earns $369,000 a year in base salary. City Attorney Rafael Alvarado Jr. now is paid nearly $310,000, according to city reports.
The council also voted to give future council members and the mayor a one-time 8% raise, effective after the November election. Council members pay will increase to $2,427 per month and the mayor’s pay will rise to $4,313 per month, city reports said.
Hundreds of other city workers across several unions, including accountants, landscape architects, police records specialists, dispatchers, supervisors, recreation workers, managers, community service officers, engineers and others — will see a 5% pay increase this year and next, with 4% in the final year.
The contracts also include other gains for various city employees, such as increased health benefits, bonus pay for bilingual officers and extra pay for sergeants.
In all, the city could be spending roughly $3.9 million above what was anticipated for raises this fiscal year, according to an analysis of city staff reports by this news organization.
The actual costs per year could be higher, as city finance director David Persselin noted future costs, such as overtime, have not been calculated.
Fremont Mayor Lily Mei said she thinks “everyone is essential” when it comes to city employees, but noted the city has also faced challenges in filling public safety roles.
“I think it’s important for us to fully fund our public safety, such as law enforcement and first responders,” she said.
“This is certainly going to be an impact to us on the budget, but it’s not something that I think is insurmountable. We will probably have to make some adjustments to meet this, but I don’t think this is going to blow through the budgets,” Mei said.
Fremont officials said despite the labor cost increases, the city will likely be able to rebalance the budget if needed in the fall without tapping its combined $51.6 million in reserves.
“The city is still recovering from pandemic-related revenue shortfalls,” Persselin said in an interview.
“We have received money from the federal government to continue services during the period that revenues are recovering. So this is not a typical business-as-usual fiscal year,” he said.
“Does this (increased employee pay) put you in a deficit? It’s a little challenging for me to answer because basically, we were in a deficit before the (contracts) because we’re using fiscal recovery funds to help us maintain services while revenues recover,” he said.
The city used $22.1 million in federal American Rescue Plan Act money to help restore services in last year’s budget and leaned on about $2.3 million worth of city reserves, after cutting some expenses in 2020 following the onset of the pandemic.
Fremont is receiving another $22.1 million in federal money this year. Persselin said the cash infusion will help cover gaps in the city budgets through 2024-25.
The City Council will get a more complete picture of its finances in the fall, when city staff will tally up the latest totals on key revenue streams, including property and sales taxes and any potential savings from city vacancies.
“Those new pieces of information, combined with the additional cost associated with the (employee contracts) that have been approved, may result in staff recommending that the council make some type of rebalancing actions,” Persselin said.
During the July 12 council meeting, Councilmember Jenny Kassan said she was concerned about the big increase in spending, and maintained that the council shouldn’t have authorized the pay raises without a discussion of the potential cuts that could result.
City staff and other council members responded that a broader discussion of the budget will take place in October, where cuts could be made if needed, with full public input.
The raises also appeared to deepen some rifts among council members. During the meeting, Kassan questioned Mayor Lily Mei for taking $4,900 in donations to her state Senate District 10 campaign from the Fremont police and fire unions and then voting on their pay.
Mei, in an interview, said Kassan’s comments were a “personal attack” and were “politically motivated,” brought up only because Kassan supports Mei’s opponent in the race, Hayward Councilmember Aisha Wahab.
“If (Kassan) wanted to, she could have called out any of the other people who also received donations such as (Fremont Councilmember Teresa) Keng,” Mei said.
Asked if she thought it was ethical to accept the donations while voting to approve pay increases for members of those unions, Mei said her choices were “solely based on what I think are the needs for our community” and not because of the donations.
“For $4,900, if you’re looking at the dollars that are in this race, that is not, I mean, it is not insignificant,” Mei said. “But it’s not significant enough for me to make my changes in terms of a decision making on labor or hiring or compensation.”