After taking a 10 percent pay cut five years ago to help the city through the recession, its employees could be getting their pay restored this winter.
When the City Council passed the 2014-15 budget in June, it instructed City Manager Toby Wells to find a way to stop supplementing the general fund with Measure H funds, dipping into reserves and relying on employee concessions.
Wells unveiled a plan at a council study session Monday night that would, within three years, completely restore employee concessions, but it would be executed at the expense of the general fund reserve and could lead to layoffs next year. Also, Measure H funds – a half-cent sales tax to increase public safety staffing – likely will continue to be used this year and next to supplement general fund expenditures for police and fire services.
All but one of the city’s six bargaining units agreed in negotiations with the city this year to get back half of their concessions over the next two years: 3 percent this year and 2 percent the next.
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The First Line Supervisors – an organization of public employee managers – went to impasse, so the city imposed a 4 percent restoration of pay over the next two years.
Members of the Miscellaneous Bargaining Unit, with more than 70 members, eventually came to an agreement with the city, but not before making a public display at several meetings, encouraging the council to dip further into reserves to make them whole now.
Wells proposed unfreezing wage increases immediately after council approval in October and restoring concessions beginning Jan. 1.
He suggested returning 8 percent Jan. 1, and the remaining 2 percent as scheduled in the 2015-16 fiscal year, but the council wanted to restore all the money in January.
Wells told them that is possible but will create a larger deficit sooner.
To implement the plan, about $1.1 million will be taken out of general fund reserve, dropping it from $4.7 million to $3.6 million. That would reduce reserves to 20 percent of a $17.8 million general fund budget. Until July, the city maintained a 25 percent or more reserve at the council’s direction.
Wells’ plan assumes projections of a 4 percent increase in revenue each year. If that is the case, reserves will start to increase again in the 2017-18 fiscal year.
“I keep using the analogy of, it is still raining, the rain is lightening up, it’s a light sprinkle now, and we are starting to get better, but we are getting better very, very slowly,” he said. “So the use of the reserve, that’s what it’s there for; it’s the rainy day fund.”
The plan includes savings by freezing a high-tech-crimes position that costs $110,000 annually and savings in police overtime realized by reassigning one sergeant and three officers from the street crimes unit to patrol.
Still, under the plan, the council next year will have to contend with a roughly $450,000 deficit, which could come in the form of layoffs in the public safety department. Wells said public safety would take the hit because its employees make up 80 percent of the positions paid for by the general fund.
He said $450,000 amounts to four or five positions, but savings could be found in other areas and layoffs are not necessarily imminent.
Wells plans to revise the Measure H expenditure plan in the coming year to find ways to minimize its use in supplementing the general fund.
The city’s bargaining units must return to negotiations with the city to hammer out details of the concession restoration before the plan can be implemented in January.
Mayor Chris Vierra asked for feedback about the plan from any of the several dozen employees in the audience Monday; none stood up.
Tuesday, Miscellaneous Bargaining Unit representative David Gorgas said, “I hope the council follows through. It’s been the goal of the union to make the city of Ceres employees whole; they have been through some very difficult times.”
Police Officer Association President Danny Vierra said the plan sounds good but he wants to talk to Wells further about the potential for public safety employee layoffs.