The fiscal year began just 35 days ago, yet the city is already
looking at a $1.2 million blow to the general fund.
City faces $1.2 million deficit
The fiscal year began just 35 days ago, yet the city is already looking at a $1.2 million blow to the general fund. The state, in passing a balanced budget last week that closes a $24 billion deficit, will borrow $800,000 in property tax revenues from Morgan Hill. In addition, the city is looking at $400,000 less than expected in sales and hotel tax revenues and development processing fees.
Again, the council is looking at ways to balance the budget. One thing that should be closely examined is the agreements the city has with its three labor unions.
Unions should consider giving up raises, again
Salaries and benefits consume about half of the city’s $27 million general fund. To date, the city has cut back 16 positions through a combination of layoffs, eliminating vacant positions and incentivized retirements, and the council met in closed session last week to discuss reopening labor negotiations.
The council directed staff to approach AFSCME, the Community Service Officers Association and the Police Officers Association, about “modifications to those contracts to see if we can save money,” City Manager Ed Tewes told reporter Natalie Everett. While Tewes declined to say how specifically those contracts might be modified, ideas include furloughs, reducing hours at City Hall and giving up planned raises.
Reduce employee labor costs before cutting services
It was a good first step when, in January, management went without raises for this year, a savings of $140,000. Likewise, the three labor unions gave up scheduled raises, resulting in a savings of $500,000.
Unfortunately, the same needs to be done again, and more drastic measures should be considered, such as furloughs and even pay cuts if the economy doesn’t quickly rebound. Unionized city workers are scheduled to receive a 2 percent cost-of-living increase Sept. 1, and police union members are in line for a 4 percent raise in April. Both amount to a $150,00 blow to the city’s general fund, and both should be rescinded.
That still leaves more than a $1 million deficit. Closing City Hall one day a month could save even more. Increasing the amount employees pay toward their benefits should also be considered. Cutting employee costs should come before cutting services, turning off street lights or allowing grass at parks to die. Remember, it is the taxpayers who pay the salaries and generous benefits of city workers, including police officers.
