San Ramon city employees could take a pay cut–including Herbert Moniz, the city manager whose $356,542 salary stunned many San Ramon residents and outted him as the richest small-city manager in the Bay Area.

Moniz said he's hoping cuts don't come to pass, but that the city talked about trimming salaries if the recession continued or got much worse years before news of fat city salaries in Bell and San Ramon last month sent shockwaves through recession-menaced California.

"We've  told them as far back as 2008 that we're going to have to start making cuts in salaries, benefits and other areas if the recession continues," Moniz said. "They understand that."

But the recession has arguably gotten worse since 2008 and Moniz isn't saying exactly when and under what conditions a pay cut from top to bottom might be triggered, calling such discussion "speculative."

Talk of pay cuts resurfaced during the last city-wide staff meeting, Moniz said, but he added a disclaimer: "They acknowledged the actions suggested. However, there was no actual vote."

And while not committing to a pay cut himself, Moniz implied that if employees take a cut, he could take one, too—or at least not accept a pay increase.  

"I am in the second year of a two-year contract with my salary frozen in year two," Moniz said. "I once, in the recession of the early '90s, had a two-year contract and gave up a seven-percent, year-two increase because the employees agreed to no base-salary increases that year."

But in 2008, even as the recession hit and talk of future pay cuts surfaced in San Ramon's city departments, Moniz accepted a 10 percent raise that year. So rejecting a pay increase next year when his contract is up, whatever the fiscal impact of the gesture, will likely not assuage the public's dismay over his or other fat city salaries.  

Meanwhile, San Ramon mayor Abram Wilson–who is the Republican nominee for the 15th State Asssembly District seat on Nov. 2–appears to be avoiding the discussion. San Ramon Patch asked the mayor to weigh in on the salary and budget situation last week but the mayor did not return calls or e-mails seeking comment, instead filing this statement through his campaign spokesperson, Matthew Dobler.

"I have forwarded your request to the city to provide figures. Mayor Wilson is unavailable for comment at this time," Dobler wrote.

Earlier this month, a CBS5 television news reporter cornered Wilson, asking him how salaries could remain high even as some fees are going up for senior citizen programs while money for park landscaping, tree maintenance, swimming pools, fountains and street sweeping are being reduced to save money.  

Wilson remained unequivocal, defending high salaries–specifically, Moniz's salary–as justified because of his 25 years with the city, his expertise and that he does his job without an assistant.

Moniz figures he's worth the money, too, and cites those same factors to justify his salary. He acknowledged the reductions in some services and fee jumps, but argued that they are signs that the city is working smarter.

"We've looked at where we can reduce and still provide service," Moniz said. "Street sweeping, we took it to the council and figured we could save money during rainy season when we don't need to sweep residential streets once or twice a week, but probably every third or once a month, so we budgeted for that and it comes out as a reduction in a level of service."

"If it doesn't work, we put it back," he said.

"We try to work smarter," Moniz continued. "Reductions in expenditures do not necessarily mean reductions in service. For instance, we received substantial reductions in costs by re-bidding large maintenance contracts."

But some city residents aren't buying that argument, especially after the city sent a newsletter to its residents listing services to be cut this fiscal year.  

"The City of San Ramon, like most government agencies in California, has been negatively impacted by the severe recession that began in late 2007," the newsletter reads. "In preparing the 2010-11 budget, City staff was challenged to continue to deliver high quality services with revenue sources that are not keeping pace with rising operational costs and new areas of development."

"Core services," such as police, fire, and "providing access" to parks and city services have been maintained, the newsletter reads, but senior center "drop-in" fees have increased, some senior facilities will be closed, both aquatic centers will be closed on certain holidays, lap swims on Sundays will be shut down in the off season, city fountains will be shut off, wreaths and banners on streets won't be put up, battery collection will cease at some city facilities, pruning at parks will be selective and street sweeping will happen only once per month instead of twice.

It's a dreary future, say some city residents, and the cuts add salt to the news that city officials bask in fat salaries, benefits and pensions.

"I was just infuriated to hear the mayor say that the city has a surplus and then to see from this letter they're blaming the economy on budget cuts and that they're taking the money from seniors, they're taking money away from the beauty of our city and the city manager gave himself a 10 percent raise," San Ramon resident Debbie Arbuckle told CBS5 news.

San Ramon's Public service's budget will drop $600,000, from $20 million dollars to just over $19 million. Parks and community services will lose about $300,000. 

"But the budget for public employee salaries, it jumped about $2 million even though no one including the well paid city manager will get raises," reads the CBS5 news transcripts.

But the CBS5 report's use of seniors and focus on budget cuts fails to tell the whole story, Moniz said.

"They wanted to appeal to emotion," he said. "If they had looked at the budget, it would have been different."

The cost of covering city employees has gone from $37,384,174 in 2009-10 to $39,478,35 this fiscal year, Moniz conceded, but that's because city contract payments are staggered and spread out over years.

"We have other city contracts for maintenance, mowing, engineering, etcetera," he said.

"The last union contract we negotiated was for four years and we just extended it for six months, including the salary freeze, so that it would end at the conclusion of this fiscal budget year," Moniz said. "The only contract city employees are the city manager and the city attorney. The union contract is
with the SEIU local."  

But none of those contracts or union bargains are automatically renewed, Moniz said, and city salaries are being adjusted each year, up and down, based on the city's "pay for performance" initiative.

"Employees are evaluated annually and any adjustments are based upon that evaluation," he said.  "Two bad evaluations in a row and the employee is terminated."

San Ramon now has a hiring and a salary freeze, not filling 32 vacancies while holding out for better economic times and guarding its $85 million budget.

Arguably the greatest financial factor menacing California cities are pension plans, too often negotiated and locked in based on good economic times. When times get tough, those benefits often drain a treasury.

Not so in San Ramon, Moniz said.

He said the city does annual benefit actuarials—studies that predict the city's ability to pay future benefits based on present and future economics—and benefit plans are adjusted. To cover present and future benefits such as health insurance or retirement pensions, the city now takes 5 percent of each employee's salary "right off the top," Moniz said. That number could soon increase, he said. It's all part of good business practice, he added.

"It's not me, it's the council and the mayors," he said. "They set the city up as a business."

But while big salaries wouldn't be a problem in a big, private business with money coming from private finds, some city residents say that's not the case with a city, where the money comes from taxes, development and other fees. It's public money, they say, and city salaries—including Moniz's salary–should reflect that.

"I don't understand how he can feel justified with that," Arbuckle told CBS5 news. "I don't know how he sleeps at night."

To see more city financials, click here.