City: More layoffs imminent if agreements not reached

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After agreeing to let go of 21 city employees in June, the Gilroy City Council moved forward with another 14 layoffs July 6. But those layoffs could be avoided if the various employee groups agree to concessions, city officials advised.

With the Covid-19 health emergency slashing a significant portion of the city’s revenue streams, mainly sales tax and transient occupancy tax, Gilroy is faced with an $8 million shortfall over the next two years, according to Interim City Administrator Jimmy Forbis.

Half of that shortfall was addressed with the first phase of the city’s financial recovery plan, which cut 33 full-time positions—12 of which were vacant—as well as furloughing most part-time staff.

The rest was expected to be achieved through concessions with labor groups, primarily through pay reductions and eliminating raises.

According to Human Resources Director LeAnn McPhillips, the city reached an agreement with the Gilroy Management Association and unrepresented employees. That agreement included eliminating a three percent raise and closing city offices to the public on Fridays through June 2022.

McPhillips said the city is close to an agreement with the International Association of Fire Fighters union, and added that the Gilroy Police Officer Association has “indicated a willingness to be a part of the solution,” with further meetings scheduled throughout the week.

Negotiations with the American Federation of State, County and Municipal Employees Local 101, however, have not yielded much results, according to McPhillips.

“After some meetings and discussions, we have not been able to reach concession agreements,” she said. “Given the communications we received from the AFSCME group, we are uncertain at this time if an agreement will ever be reached.”

Twelve positions represented by AFSCME are slated for layoffs if an agreement is not reached, with two vacant. Positions include maintenance workers, the deputy city clerk, a custodian, planner and others.

If concessions are not reached, layoffs are expected to begin Aug. 5, according to McPhillips.

Forbis said if no action is taken to balance the budget, the city would burn through more than $400,000 of its reserves monthly.

“We are left at this point with no other options,” he said, adding that a previous budget report that assumed businesses would reopen by July 1 was “too optimistic.” “We have reduced the budget as much as we feel we can to keep the doors open.”