News

Unions asked for another $1 million cut

Largely because of a $3.2 million rise employee compensation costs, the city faces an estimated $2.1 million budget deficit next fiscal year. City management is asking the city's unions for $1 million in cuts to reduce pay and benefit cost hikes, according to a strategy presented Tuesday.

City Manager Kevin Duggan presented his annual budget balancing strategy earlier than usual, as he plans to retire April 2. The council did not vote on the strategy, but was generally supportive in its comments at the Tuesday. Some expressed concern that the strategy depended too heavily on hopes for $900,000 in new city fee hikes and new city land lease revenue, especially after the city last year raised service fees considerably across the board.

"We just cannot expect to grow our revenue enough to be able to cover those costs," said council member Ronit Bryant about pension cost hikes. "Cost containment is going to have to be a really important part of this."

Without cost cuts, the city's general fund expenditures could jump by $3.5 million. Revenues are expected to increase for the first time in the recession, but only by $1.2 million from new fee revenue and modest tax revenue increases.

The jump in general fund costs are primarily due to a $3.2 million rise in compensation costs estimated for the city's 650 employees next year, including $2.5 million increase in the city's retirement pension costs, a $741,000 hike in health insurance costs, $240,000 in pay raises and $107,000 in other new compensation costs. City officials expect similar hikes in pensions costs over the next few years.

"I like the blueprint that's been laid out," said Council member Mike Kasperzak, but urged the city management to seek "alternative service delivery models" to cut costs long term. In other cities, fire departments have been combined with those of other cities and library services have been contracted out to the county. In Mountain View, talks are underway to negotiate lower costs for animal control services, either in a new contract with Palo Alto or a service further away in southern Santa Clara County.

"It's the long term things that are going to get us out of this cycle," in addition to increased sales taxes and property tax revenue, Kasperzak said.

If the city is unable to balance the budget using some variation of Duggan's strategy, Duggan has prepared three tiers of $3.7 million in additional cuts that could be made. The cuts echo possibilities discussed in previous years, including the laying off of as many as 16 city employees and eliminating as many as nine vacant full-time positions.

In tier one, which would save a total of $637,000, filled positions that could be eliminated include a stagehand at the Performing Arts Center ($72,000), the fire department's public education specialist ($121,800) and a police community services officer ($112,000.). It also includes the elimination of a vacant position dedicated to weed abatement in city parks and medians ($105,000).

Tier two (total savings of $1 million) includes the elimination of two filled community service officer positions ($212,000) a vacant police records specialist ($111,000) and a vacant deputy fire marshal position ($217,000), the elimination of a filled code enforcement officer position ($42,000), a filled accounting technician job in the finance department ($39,600) and a filled parks maintenance worker position ($97,400), among other cuts.

Tier three cuts deeper to save $2.1 million, including the elimination of five filled police community service officer positions ($564,000), the elimination of a filled police records specialist position ($121,000) and lowering union-contracted minimum staffing levels in the fire department to save overtime costs ($600,000) and a reduction in library hours, its materials budget and the elimination of one vacant librarian position to save a total of $272,000 from the library.

City Council members hope not to have to make those cuts.

"Every time we ratchet down services, nobody feels good about it," said council member Laura Macias.

Comments

 +   Like this comment
Posted by Hank Snow
a resident of Old Mountain View
on Mar 9, 2011 at 6:13 pm

What is S&P rating for city of M.V. GO bonds?


 +   Like this comment
Posted by Alfred W
a resident of Castro City
on Mar 9, 2011 at 9:53 pm

"A vacant position dedicated to weed abatement in city parks and medians ($105,000)"
6 figure salary for cleaning up weeds, where to I sign up!


 +   Like this comment
Posted by Observer
a resident of Old Mountain View
on Mar 10, 2011 at 7:42 am

Duggan negotiated the most generous retirement packages in the state (2.7% at 55) and is now asking the union to kick in more as he supposedly retires on April 2nd with no one to replace him. He'l be back double dipping. He's already the highest city manager around. In short the cuts he is proposing are necessary due to all the high salaries he negotiated during his tenure. He walks out secure, people of Mountain lose services as we pay him nearly $300,000 a year in retirement! Wake up Mountain View, you've been had.


 +   Like this comment
Posted by Elvis
a resident of Martens-Carmelita
on Mar 10, 2011 at 8:47 am

Duggan is like the Captain of a sinking ship telling the crew and passenger just how fast the ship will sink before he steps into the only life boat.

Here's a thought. He has no problem recommending that the unions take a cut. How about he volunteer to reduce his retirement and benefits payout? Lead by example. Yeah, I thought so.


 +   Like this comment
Posted by Hardin
a resident of Cuesta Park
on Mar 10, 2011 at 12:51 pm

Threatening to garnish Mr. Duggan's wages may be emotionally satisfying, but really doesn't solve the problem.

As noted in the article, there was an INCREASE in employee compensation costs of $3.2 million. Assuming a worst case where Mr. Duggan's wages and benefits were taken away completely, that would barely help with this deficit. Remember too, that we should expect the RATE of employee compensations costs to increase, year over year, for the forseeable future, due to rising health care costs.

It will take a battery of strategies: reducing pay, reducing benefits, reducing service, and increasing contribution limits to address this problem permanently.

And it require shared sacrifice, from city employees AND their unions, as well as residents and companies who live and work in the City.


 +   Like this comment
Posted by Sue
a resident of Whisman Station
on Mar 10, 2011 at 2:00 pm

ISTR that Duggan voluntarily declined a raise in 2009 and convinced the city attornet to do the same.


 +   Like this comment
Posted by Read People
a resident of another community
on Mar 10, 2011 at 2:33 pm

I wish you negative Nellys would stay up-to-date and informed of these issues. Kevin isn't the final say for union negotiations, Council is. Over 20 years Kevin has brought this City into greatness. Increases in salary and benefits has been happening for a long time, why didn't you speak up sooner? Leave Kevin out of this, let him retire in peace, this issue is bigger than him and isn't because of him. Let's read up on this issues and tackle the problem strategically not emotionally. Jeez.


 +   Like this comment
Posted by KD
a resident of Waverly Park
on Mar 10, 2011 at 5:04 pm

Some math: $3,200,000 increased compensation costs divided by 75,000 MV residents = $42.66 per MV resident per year.

Now let's pretend that this was a national (rather than municipal) problem. $42.66 x 310,000,000 US residents = $13,226,000,000 (13 billion, 226 million dollars)

That is 3 times greater than the Democrats say they can live with in dealing with the federal deficit. Do you think that we have a problem here in MV?

I think so.


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