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HomeMy WebLinkAbout03/01/2011, - SLO PROPERTY OWNERS ASSOC-SHORT/LONG TERM BUDGET REDUCTION IMPLEMENTATION San Luis Obispo " Property Owners Association P.O.Box 12924 San-Luis Obispo,CA 93406 Suggested Short and Long Term Budget Reduction Implementation Strategies for the City of San Luis Obispo Budget Reduction Measures Prepared by the San Luis Obispo Property Owners Association For the Board of Directors Luncheon February 24, 2011 SUGGESTED STRATEGIES POTENTIAL IMPACTS ° LOWER BASE BUDGET:Reduce city expenses This will make a dent in the debt and immediate- to equal actual city revenues minus 20%of the ly curtail the growth in the gap. This provides projected structural gap. The goal is to reduce a viable strategy to eliminate the gap in five personnel costs to 50% if the budget. Require all years. city department heads to utilize staff layoffs, furloughs,job sharing and other cost-cutting measures. Go department by department: some can take bigger cuts than others(Planning, Parks& Rec) • REDUCE NON-ESSENTIAL MIDDLE MANAGE- MENT STAFF: Assign a value to the jobs and This will provide savings without cuts in direct average the"step" positions in each depart- services to the public. This is an implementa- ment(Job 1, step 1, step 2; etc.;job 2, step tion tool for department heads. 1,2,3, and so on). Find the average of jobs and pay step levels, and commit to lowering it This means cutting out people in the upper and middle sections, not just eliminating the lowest level or lowest paid clerks. The goal is to cut deadwood without cutting direct city services. (Parks and Rec appears top-heavy based upon how many people have titles). ESTABLISH A NEW SALARY BASELINE. Salaries will still be competitive with those of the Establish city personnel salaries and benefits otherlocal.cities and agencies in the region. comparable to Central California public and There is little chance an employee will leave private sector employees, rather than pre- to work in another local jurisdiction. selected cities throughout California. Avoid direct cost comparisons to other pre-selected cities.(Note: SLO county median family income is $63-$65,000 for 4-5 person households). 1. NOTE 1: While most staff salaries and benefits are NOTE 1: These salaries can therefore be set by union contracts, there can be enough layoffs renegotiated when the contracts come up and furloughs to effectively lower the salaries for renewal. to more closely resemble those in neighboring communities). NOTE 2:Department heads can lead by example and NOTE 2: Taking a pay cut to preserve other de- a�a fen percent cut and pay their portion of their petal jobs will increase morale and demon- retirement contribution up to 6%(equivalent of strate that"the city gets it."Please note that all- Social Security).They are not bound by union but four focal judges recently agreed to pay cuts, contracts but serve at-will and most will gladly there is local precedent for this idea. This will al- take a pay cut to keep their jobs. so pre-empt union complaints that management is balancing the budget on the backs of their membership. REDUCE OVERTIME COMPENSATION:Minimize This will reduce overall amount and rate city employees'overtime by prohibiting overtime pay of paid overtime by eliminating the potential of for any employee who has not worked a 40-hour an employee working a 40-hour week and then week, rather than the minimum performance hours, adding sick time or vacation time to claim and review"pay status" hours for both safety overtime on those same hours. and non-safety personnel above state norms. NOTE 3: Officers trade hours to push up their pay scale. They call in sick for one another, or take a vaca- tion day and then decide to work it, etc. Someone knowledgeable about this should review the past year's records confidentially so word does not get out. When cuts are implemented officers should be cut who have abused the system or who have the most complaints filed against them. These abuses need to be noted in their personnel files. BEGiN OUTSOURCING CITY SERVICES: Park maintenance,janitorial, videotaping, Savings in salaries, benefits and retirements Recruit for a contract worker along with the current Savings in salaries, benefits, retirements. recruitment for the Finance Director and Community Development Director. Outsource daycare at the schools—let the schools This will eliminate the admin staff"markups" handle it or CAPSLO or the YMCA. to oversee these programs and help achieve the recommended cuts in middle management • REDUCE METER MAIDS COSTS AND EXPENSES: This could save more in salaries than is Furlough meter maids randomly to lower their salary. lost in ticket revenue. People will still put money in meters. o ELIMINATE BENEFITS FOR PARTTIME WORKERS: Cuts unnecessary benefits without cutting a job. This IS happening at the parking garages and possibly elsewhere. NEW HiRES INTO VACANCIES: Vacant city Saves money now and lowers future salaries positions cannot be filled for at least 6 months. and corresponding retirement payments by (1) After 6 months, fill vacant city positions at effectively combining positions. 70-80%of the previous employee's salary; or, (2) the previous employee's duties can be given to This can be implemented with the Finance another employee with a reasonable raise for the and Community Development positions that additional new work, not to exceed the previous are currently vacant as a show of good faith departing employee's salary. that management is getting cutbacks, too. Z. Additionally, require future city employees and/or new This is not really a two-tier retirement hires to have a combination of years of service and system, it increasing the retirement to age 87 to 90 and be at least 57 years old before they age 57 for full benefits, much like can retire with full benefits. Social Security. • RESTRUCTURE THE WORKFORCE to better This would make the city workforce reflect the demographic characteristics of our more attuned to the local population and regional and local population. Fill new hires with older would gradually lower salaries and still workers who would be paid less but who would be attract quality experienced staff. attracted to the central coast lifestyle. We have never had a shortage of qualified applicants who want to live on the central coast CARS, CELL PHONES..TRAVEL Eliminate ALL car Verifiable immediate savings; similar the policy allowances and cell phone allowances for everyone. implemented at the state level. These are tax-deductible expenses. ELIMINATE ALL PAID PROFESSIONAL TRAINING Verifiable immediate and long term savings. Let employees pay for it themselves to get merit pay increases. They can write it off on their taxes. This goes for fire and police training as well. REVISE PREVAILING WAGE REQUIREMENTS. This will save 20%or more of the cost of con- A charter city does not have to pay prevailing struction and will also show the city is firmly wages on city construction projects that are entirely committed to serving citizens. Infrastructure city funded. Review all CIP and those that are was a major Measure Y priority which has now city-funded can go forward without prevailing wage been severely reduced. requirements. THE FOLLOWING CONCERNS MAY BE SUBJECT TO UNION REVIEW AND/OR NEGOTIATIONS: 1) COLAs: Grant them only to employees who work beyond the minimum retirement age; deny COLA benefits to employees who may retire early. Alternately, COLA benefits could be granted to employees if and when the plan is fully funded. Grant COLAs at 1.5%and not the rate of inflation. This is a long term solution that can be implemented in new contracts. 2) SICK TIME: Limit the accumulation of unused sick time for city employees to 12 months when calculat- ing benefits. In other words, use it or lose it. Sick time cannot be counted toward retirement pension as has occurred in the past. 3) PERS CONTRIBUTIONS: The city currently pays its share and the employee's share of PERS contri- butions. Instead, do not pay the employee's share, or pay only an amount that still requires the em- ployee to contribute a minimum of six percent(6%)of their current salary, which is equal to what he would pay into Social Security. Currently these employees are exempt from Social Security. Depart- ment heads can start immediately; this is an area of negotiation for other unionized employees. This will be a huge immediate and longer term savings for the city and is fairly painless. The alternative is the employee can quit and pay in 6%at his next private sector job opportunity. 4) PUT A CAP ON RETIREMENT BENEFITS, not to exceed a certain percentage or the cap, whichever is greater, is a long term solution. This is what the UC staff are rebelling against: apparently$245,000 a year in retirement isn't adequate. Higher paid employees could reasonably be expected to invest some of their income into retirement accounts. (Note: Retired city employees often have second careers as well as private investments outside of their retirement accounts). 3. San Luis Obispo property Owners Association P.O.Box 12924 San Luis Obispo,CA 93406 *SAN LUIS OBISPO PROPERTY OWNERS ASSOCIATION (SLOPOAI* POSITION STATEMENT FOR THE SAN LUIS OBISPO CITY BUDGET (For the 2011-2013 Budget Setting Process as originally Prepared in 2008 by SLOPOA) SLOPOA can only support an overall city budget and budget-related goals, policies and programs which respect and reinforce the following specific guidelines in order to maintain our high quality of life in both our beloved city and our central coast region: 1) That the first and foremost function of local govemment is to provide those services that individ- uals and groups otherwise cannot provide for themselves, such as infrastructure construction and maintenance, and public safety; 2) That a balanced budget must be the first priority for our city now and in future years; 3) That a balanced city budget should never be predicated upon increasing taxes, fees, or surcharges for services to meet future city budgets or to satisfy present budget"shortfalls." 4) That a healthy reserve of at least 20%be maintained for unforeseeable emergencies; 5) That budgeting for government operations should be based upon actual revenues based on histori- cal precedent of the preceding years and general economic forecast for the coming year(s); 6) That city staff members' salaries (including benefits) and city staffing levels should be commensu- rate with those of the local private sector employers and private sector needs; 7) That local property owners and rate payers should only pay their reasonable (proportionate) share of any legitimate/justifiable future tax rate or fee increases based on reasonable cost of living adjustments. 8) That property owners and taxpayers within a specific district of the city should be allowed to levy additional taxes or fees for specific improvement projects in a given district consistent with overall city budget priorities and projects. 9) That allocations for all city-funded programs (as well as those receiving matching funding and/or grants) be done in a transparent and easily understandable manner(as now cleady required by state law)with information readily accessible to the public to include specific employee salary and benefit increases, new capital costs, debt service for the City of San Luis Obispo, and all other new or fixed expenditures. 10) That the San Luis Obispo Property Owners Association, which represents the major property owners in the City of San Luis Obispo, be recognized as a stakeholder for purposes of public input on fiscal issues facing the city of San Luis Obispo. 4.