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 because city officials had been assuming police would go without raises after their contract expired in June.
With their contract expiring this June, police agreed to extend their current contract another year without the 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 pay raises, called cost of living adjustments, the city would save another $1.46 million, Levin said.
Last year, all city employees, minus 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. The City Council's goal this year is to cut those raises by $1 million.
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, Firefighter's Association president John Miguel said his union was not considering a complete elimination of pay raises, but a reduction in pay raises 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.
With police being the only union with a contract expiring this year, the city's other three unions 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, including the Police Officer's Association," 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 services 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, employee compensation costs have risen by almost $4 million a year at a time when tax revenue has remained relatively flat, but 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 plans for employee salary savings that the city manager's office and union leaders can agree on.