MODESTO -- Modesto officials have managed to cut about $500,000 in general-fund spending through negotiations with employee groups in the past 3½ months, says a report going to a City Council subcommittee Monday.
The council approved a $348 million budget for Modesto in June, with the expectation of getting concessions from labor groups to resolve much of a $3.8 million general fund shortfall. City leaders said they were faced with cutting staff and public services if they didn't get concessions from the six unions and unrepresented employees.
The council approved an agreement in July with the 212-member Modesto Confidential and Management Association that should result in $382,400 of general fund savings, and a recent pact with nonunion management employees will shave $123,650.
Some additional savings are expected from a tentative contract ratified Aug. 31 by the 400-member Modesto City Employees Association, which could receive council approval Oct. 2.
Steve Christensen, acting budget manager for Modesto, said he had seen only a rough estimate that placed the general-fund savings from the MCEA contract at $180,000. That union includes a large contingent of public works employees who are primarily paid from enterprise accounts — not the general fund.
The city has achieved most of the savings thus far from pension-reform concessions. Employees have agreed to pay their share of the cost for pension benefits through the California Public Employees Retirement System. The city had agreed in previous labor contracts to pick up almost all of the employee contribution.
No banking sick leave
In another concession, the two unions that have settled and management employees agreed they no longer could bank their sick leave for conversion to retirement health coverage. The employees agreed to take a week of unpaid furlough this year and will receive a 1.5 percent raise in July, although those terms are slightly different in the MCEA agreement.
The city still needs agreements with unions representing public safety employees, who are primarily paid from the general fund. The $110.8 million general fund is fueled by revenue from property and sales taxes and license fees.
Thus far, the negotiations have resulted in expense cuts of $710,075 that are not tied to the general fund, not counting what should be substantial savings from the tentative contract with the MCEA.
Councilman Dave Geer said Friday that he believes the city can achieve more savings through talks with the remaining unions.
"The administration has been effective thus far in working with the different labor groups," he said. "I am content to see how it goes."
The council finance committee, including Dave Cogdill Jr., Dave Lopez and Stephanie Burnside, will consider recommending changes to the operating budget to reflect the savings.
The special finance committee meeting is set for 3 p.m. Monday in Room 2005 of Tenth Street Place, 1010 10th St.
Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.
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