[ From "City defends labor agreements," By Eric Lindberg, DAILY SOUND, March 25, 2009 ]


... Citing a continuing economic crisis and a projected $9.5 million budget shortfall for the city next year, a string of public speakers criticized officials for approving any salary and benefits increases.

Councilmember Das Williams countered by pointing out that the agreements also include concessions that will save the city money in the next fiscal year compared to budgeted figures.

“At this point, the rhetoric of this has gotten so out of control that nobody is reading the fine print of this agreement,” he said. “…There are massive concessions in this agreement that save the city money.”

For example, he said, city supervisors and managers will be subjected to a mandatory 5 percent furlough and won’t be able to cash out vacation time. That outweighs their 2.5 percent salary increases next year, which are also being delayed to lessen the impact on the city’s cash-strapped general fund.

The plan will put the general fund $288,814 below current labor costs next year, said Kristine Schmidt, the city’s employee relations manager.

“It is true that, in the long term, these labor agreements are going to increase the city’s ongoing budget costs,” she acknowledged.

But those impacts — $1.8 million across the city’s ledger and $690,000 in the general fund specifically — won’t be felt until 2011 and 2012, she said, adding that the city could continue furloughs and other cost-cutting measures in the future.

Williams also pointed out that some of the contracts up for approval deal with employees who are paid through enterprise funds, which are separate from the general fund and are weathering the economic downturn better.

“We need to do this agreement to save money for next year,” he said. “…I think we talk too much and we need to take action.”

Councilmembers Dale Francisco and Iya Falcone had the opposite approach in mind. They asked for a few weeks to take another look at the agreements in closed session.

Citing the latest tax revenue figures for the city — which show a 11.7 percent drop in sales taxes in the fourth quarter of 2008 as well as a 20.8 percent drop in transient occupancy taxes last month over the same periods last year — Francisco said city leaders have a responsibility to deal with economic realities.

“The situation has grown dramatically worse for the city’s revenue picture just in the last week,” he said. “…What I don’t want to see happen is large-scale layoffs of city workers.”

Several public speakers argued that point as well, saying that any wage and benefits increases now will result in more layoffs down the line.

Falcone said she still isn’t sure how city employees fall on the issue — whether they would prefer a salary increase and possibly more layoffs, the status quo, or even wage cuts.

“We don’t know where the true sentiment lies, particularly with the folks that are in the various bargaining units,” she said.

But she said one thing has been made clear in recent weeks: the public is not happy with salary and benefits increases, particularly given the economic crisis.

“The community is speaking out in very, very loud and large numbers with their apparent discomfort with how things have been handled not just now, but previously,” she said.

Community angst has been growing since early February, when the city finalized a deal with its largest group of union workers; an agreement that provided salary and benefits increases between 5 and 8 percent during the next two years.

The downward economic spiral has since prompted city negotiators to return to the table with that bargaining unit, Schmidt said, and they are currently in the process of discussing possible amendments to the deal.

“We have a joint interest in preventing the loss of jobs and in preventing the loss of services to the community,” she said. “I think they’ve been a very active partner in discussing ways in which we can do that.”

Schmidt said options include unpaid furloughs, suspension of vacation payouts and other concessions to address the impending budget crisis.

Some city leaders used those discussions to counter the proposal put forth by Francisco and Falcone to wait a few weeks and examine the latest round of union contracts...

Ultimately, the council voted 5-2 to approve the contracts, with Falcone and Francisco in opposition. The agreements involve nearly 575 employees, including water and wastewater workers, harbor and airport patrols, hourly workers, supervisors and managers.

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Daily Sound — City defends labor agreements