http://mv-voice.com/print/story/print/2009/04/17/city-employees-may-be-asked-to-take-pay-cut


Mountain View Voice

News - April 17, 2009

City employees may be asked to take pay cut

by Daniel DeBolt

Mountain View officials are in talks with the city's labor groups about ways to ease the impact of a projected $6 million budget deficit — and one of those ways involves reining in salary increases.

The city's 600-plus employees may be asked to forgo at least a portion of pay raises for next year, though talks have not reached any specific proposals. Any pay cut would be voluntary for most of the city's unions, as all of them have contracts locked in for the next year, with the exception of the SEIU, which represents most of the city's lowest paid workers.

The current deficit arose after the economic recession caused city revenues to decline despite rising costs. Among those rising costs, personnel expenses are climbing at a rate of about $3.8 million a year, a cost which will compound if solutions are not found, warns city manager Kevin Duggan.

Patty Kong, the city's finance director, says the personnel cost hikes are due to pay raises to city employees in the form of cost-of-living adjustments ($2.3 million), and regular pay raises and merit pay ($700,000), with the remaining $800,000 from cost increases for health and dental benefits.

Not including benefits, the total cost of city employee salaries has gone from $53.8 million in 2006 to $62.3 million a year in 2008 — an increase of 16 percent. The city has a general fund budget of $89 million, and revenues are expected to remain flat through 2012.

Meetings underway

Although Duggan says his predictions are not "overly pessimistic," some union representatives believe they may be too conservative. Labor unions, including the Firefighter's Association, have been meeting with the city manager to figure out how to address the budget issues more specifically.

Duggan contends that the "less painful" budget cuts have already been made, but union representatives and some council members think there may be alternatives to some of his proposals, which include closing the library one day a week and cutting three police officer positions. Specific budget proposals will be presented on May 5.

"We have and we are continuing to work with city staff to try and find a solution to this," said John Miguel, president of the Mountain View Firefighters Association. "We were in meetings as late as yesterday [Monday] regarding this and what could be done."

Next week the city is set to begin contract negotiations with the SEIU, whose contract is set to expire in June. At this point the union, which represents employees in nearly every city department, is still gathering information about the city's budget situation.

"Everybody [at SEIU] is on board to at least be a part of the solution, if there is a problem," said Chris Costanzo, chapter chair. "We're not going to stick our heads in the sand — we really want to understand" the situation.

Mayor Margaret Abe-Koga expressed concern that the city's lowest paid employees could be strong-armed into foregoing salary increases while the groups that have contracts would not have to.

"This needs to be a group effort, we can't single out one group," Abe-Koga said.

To patch the $6 million deficit in the $89 general fund budget next year, Duggan has proposed cutting the city budget by $4 million and filling the rest of the gap with $2 million of the city's $38 million in reserves. The cuts would likely mean elimination of staff positions, but whether that can be done without layoffs is unclear. Duggan aims to reduce staff through attrition.

If city employees agree to forgo pay raises, it wouldn't be the first time. In 2003-04, non-public safety employees took a pass on cost-of-living adjustments, agreeing instead to a $700 lump sum and additional time off (City Hall shut down during the holidays that year). Miguel says firefighters were not asked to take a pay cut then.

Calls to current and former Police Officer's Association presidents were not returned by press time.

Sacrifices

Costanzo said the SEIU was not taking an "adversarial" approach to negotiations. The SEIU will be engaging in a collaborative "interest-based" approach, he said, which involves department heads negotiating with a team of city staff who are SEIU members. He said this is cheaper and may be less contentious than "position-based" bargaining, which in the past required the city to pay for an outside attorney to mediate negotiations.

For his part, Duggan, who currently makes $251,125 a year, is refusing a pay increase that could total about $20,000. He was scheduled to receive a 3.2 percent cost-of-living adjustment in July and an additional merit pay increase of up to 5 percent.

"Now I'm just saying forget about it, to set an example basically," Duggan said. Given the state of the economy and how it has affected people, "I simply don't think it is an appropriate time for me to accept such increases."

Duggan says city department heads have expressed interest in foregoing similar pay raises. City attorney Michael Martello said he hasn't decided whether he'll forgo his pay raises yet.

"Certainly if a critical mass [of city employees] is going to do it I would certainly go along with it," Martello said, adding that it wouldn't be for "symbolism" but to make a "real difference" and continue the city's tradition of being a year ahead of other cities in anticipating budget problems.

E-mail Daniel DeBolt at ddebolt@mv-voice.com

Comments

Posted by MV Reader, a resident of Cuesta Park
on Apr 17, 2009 at 10:20 am

NO ONE is talking about a pay CUT - it is a pay freeze. People in the private sector have lost their jobs, or are taking actual pay cuts. The proposal here is that no one loses their jobs and no one takes a pay cut. In the midst of deep recession that sounds like a pretty good deal.

And as the article points out, city salaries have already gone up 16 percent since 2006, and that does not include the major cost of benefits.

And lets be clear - city employees have NOT suffered in the last 5-10 years. How many actual layoffs have occurred? We need the city to keep up services while keeping costs flat - not closing city hall or the library.

City employees do a good job but it is time for them ALL to share some of the pain that is affecting all Mountain View residents. Accept a pay freeze for the next year and give Obama a chance to turn around the economy.


Posted by Jeff Wampler, a resident of Monta Loma
on Apr 20, 2009 at 3:57 pm

For the life of me I cannot understand how a article about a budget and top salaries make absolutely no effort to put the salaries in perspective. How much do the same folks make in other Bay Area communities?
Also it is amazing to me that the reporter did not ask the City Manager why so many thousands of overtime is being paid to well paid employees.


Posted by Mike Latham, a resident of Old Mountain View
on May 5, 2009 at 8:58 am

You speak about salary comparisons? Many of the Bay Area Cities like San Mateo have been forgoing raises, agreeing to contracts without raises and allowing position elimination for over 15 years. Many communities realized this 16% increase over 2006, because many communities were playing catch up. They had promised for 10-15 years to bring these employees up to median. That happened for many in 2006-2007. Many of these civil servants could have gone to the higher paying cities or to the public job market, but they are dedicated to their communities. Let's not rake them over the coals because they have a job. Just wait until they don't and see what City Services you lose. Be careful what you ask for, you may get it.