While the city approved cuts that resulted in five layoffs over
the past several months, city managers also approved merit raises
totaling about $150,000.
While the city approved cuts that resulted in five layoffs over the past several months, city managers also approved merit raises totaling about $150,000.
Since the fiscal year started July 1, two-thirds of eligible union-represented city employees and one-third of eligible non-union employees received raises. City management and most of the City Council maintain that they have to keep doling out raises to keep their staff hard-working and efficient.
Councilman Greg Sellers said a wage freeze would have negative effects on the city and its productivity.
“The damage to the organization would be greater than any minimal savings it might accrue,” he said, adding that he didn’t know if the savings from withheld merit raises would have totaled enough to save jobs.
But not all council members think handing out merit increases while laying off employees is a good idea.
“That surprises me,” Councilwoman Marby Lee said, adding that she’s heard a lot from residents who say they’d like to see pay cuts in City Hall.
“It’s something we at least need to talk about,” she said. “Whether we do anything about it, I don’t know, but I think we at least need to talk about it.”
Fifteen of the 40 merit raises to union members were granted in November or after, which is when the council started bracing itself for cuts. During the council’s Oct. 22 meeting, Tewes reported that sales tax revenues were down. In December, Tewes presented a budget reduction strategy to the council that addressed a $2.2 million shortfall due to declining sales tax and development-related fee revenues. The council’s January decisions resulted in cuts that left five city employees jobless.
A draft 2009/10 city budget will be out in early May, and City Manager Ed Tewes has already said declining property tax revenues will mean at least $1 million more cut from the general fund.
In December, Recreation Supervisor Maureen Drewniany received a $2,976 annual salary boost, making her base salary $77,376. Her coworkers, Recreation and Community Services Manager Julie Spier and recreation coordinator Phyllis Dieter, were not so lucky: council approved their layoffs in January, saving $198,000 a year.
As part of the cuts, the Morgan Hill City Council called upon the city’s three unions to give up half a million dollars worth of salary increases over the next two to five years. AFSCME, the Police Officers Association and the Community Service Officers Association met the challenge, each deferring 3.5 to 4 percent of their upcoming cost-of-living increases, which combined met the $500,000 mark.
Each union member will still get some cost-of-living adjustments over the next several years, including a 2-percent increase effective Sept. 1.
Management, too, will forego their 3-percent cost-of-living increase they would have received on July 1, a savings of about $140,000. But the merit-based increases have still been handed out. Emergency Services Coordinator Jennifer Ponce received a $2,448 annual increase on Jan. 11, bringing her salary to $84,048.
Still, Mayor Steve Tate said staff’s willingness to negotiate was encouraging. When asked whether he thought the merit raises should continue to be granted, Tate asked:
“How can you tell people that you’re not going to live up to the contract?”
All three union contracts stipulate that if an employee scores satisfactory or better on a performance evaluation given around their hire date, the employee gets a 5 percent raise over and above the staggered cost-of-living adjustments already bargained for.
Of the 62 eligible union employees, 40 have gotten merit raises so far this year, according to city documents. That’s about on par with years past, Human Resources Director Brian Stott said.
There are 147 union employees in the city; 85 started off the year ineligible for raises. These 85 employees already make the top amount possible for their position, Stott said. So while they’ll keep getting cost-of-living adjustments, they won’t get any more merit raises, he said.
Councilman Larry Carr and Tewes kept in line with Sellers’s sentiment, that well-paid workers are more efficient. A main tenet of the budget principles was to streamline the organization to make it a “small, but excellent” organization; paying employees well is one way to achieve that, Tewes has maintained.
In Gilroy, City Administrator Tom Haglund drew criticism last month when he signed off on $96,000 in raises to 23 city employees after council directed him to cut costs wherever possible and 48 workers lost their jobs. This included an $8,000 raise to Human Resources Director LeeAnn McPhillips, bumping her salary and benefits over $170,000. She has given back the raise. The Gilroy City Council has since called for a wage freeze, to the chagrin of the city’s unions.
Sellers said the layoffs were unfortunate.
“There were great folks who were not able to (keep their jobs) because the work wasn’t there,” he said. “I don’t know that any merit raises would have been sufficient” to save a city employee’s job.
Post-cuts, Sellers said, “We must continue to be an outstanding organization, and part of that is not undermining the interest and enthusiasm of those folks that are remaining.”
See a list of the salaries of the city’s unionized employees.
