Modesto is considering a freeze on hiring and promoting workers and a review of spending to help the city weather drastically higher pension costs and a potential recession within several years.
The freeze would not apply to the Police Department’s efforts to increase its staffing from 218 to 240 officers or “other essential positions as approved by the (City) Council,” according to a city report. Mayor Ted Brandvold said the freeze also would not apply to firefighters. The council will consider approving these measures Tuesday.
Brandvold said he asked for these steps, adding that he is most concerned about rising pension costs. The city report states that Modesto expects its pension costs to increase by more than 50 percent in five years.
The city expects to pay the California Public Employees’ Retirement System $21.27 million in its current fiscal year. Local governments across the state are bracing for higher pension costs. The report also says Modesto’s general fund revenues are flat.
But this belt-tightening comes as the council will look at higher pay for some firefighters.
The council will consider on Tuesday approving incentive pay for 18 firefighter paramedics and 33 firefighters assigned to the Fire Department’s technical rescue program. The paramedics would see their incentive pay increase from 6 percent to 10 percent and those in the technical rescue program would receive 5 percent incentive pay. These increases are expected to cost Modesto nearly $191,000 total in its current and its next fiscal year.
Brandvold defended the incentive pay, saying it was an outstanding issue the city agreed to address after reaching its most recent labor agreement with the Modesto City Firefighters Association in April 2016.
The report on the hiring and promotions freeze and spending review does not say how much money Modesto expects to save or the impact on city operations. City Manager Jim Holgersson would report back to the council on this. The review requires the city manager’s office to approve purchases budgeted but not yet made and new spending requests. Brandvold said he envisions the review will be for large purchases and not routine expenditures.
In other action, the council will consider:
▪ Banning smoking in city parks and other publicly owned spaces, including plazas and recreational areas. The penalties for violating the ban range from $100 to $1,000.
▪ Terms for a proposal that would provide American Specialty Healthcare with 150 free parking spaces in two city downtown parking garages for five years. The company is in the process of buying the City Mall office complex at 11th and J streets for its corporate office. In exchange for the free parking, American Specialty Healthcare will keep 150 jobs at its headquarters. The free parking will cost the city $144,000 a year, but a report says that will be more than made up for by the jobs’ economic impact. The firm will relocate about 80 workers from existing sites and eventually hire an additional 100 workers for its headquarters.
The council will meet at 5:30 p.m. in the basement chambers of Tenth Street Place, 1010 10th St.
Kevin Valine: 209-578-2316