Police give up pay raises for a year
Union raises cost city $2.7 million last year
With just a few weeks left to patch a $4.3 million general fund deficit, the city's police have agreed to go without regular pay raises next year.
Unfortunately the agreement with police does little to lower this year's projected $4.3 million budget deficit for the fiscal year beginning July 1, because city officials had been assuming police would go without raises after their contract expired in June.
Police agreed to extend their current contract another year without the annual raise, called a cost of living adjustment. Over the last two years, police have received the raise, which is worth 3.2 percent of their salaries. That would cost the city about $560,000 to do again this year, said assistant city manager Nadine Levin.
If the city's three other unions follow the example of police and forgo the cost of living increases, the city would save another $1.46 million, Levin said.
Last year, all city employees except department heads received raises worth $2.7 million, including cost of living adjustments, merit pay for good performance and "step" increases in pay based on years worked.
So far, the agreement with police appears to be the biggest concession to come from one of the city's four unions in talks to reduce the growth of employee compensation costs. On May 4, John Miguel, president of the firefighters association, said his union was not considering a complete elimination of pay raises, but a reduction worth $1 million in savings to the city over the next two years. He said he hoped to prevent cuts to city services and employee layoffs.
Since their contracts are not expiring, the city's other three unions, including the Eagles and the SEIU, are being asked to make concessions that are purely voluntary.
"We are still in conversation with all groups in how we can achieve that $1 million," Levin said.
As part of a "three-pronged approach" to fixing the $4.3 million deficit, the city is hoping to get $1 million in savings by reducing the growth of employee compensation costs, $1.2 million from service fee hikes and $2 million from other budget cuts.
Employee compensation costs are 80 percent of the city budget. Because of pay raises and increasingly expensive pensions and health care benefits, these costs have risen by almost $4 million a year at a time when tax revenue has remained relatively flat, although it is now starting to recover.
The clock is counting down to a June 8 meeting where the City Council will be presented with the best plan possible for employee salary savings that is acceptable to the city manager's office and union leaders.
E-mail Daniel DeBolt at firstname.lastname@example.org