Two of the city’s four unions are expected to avoid layoffs by
accepting furlough days and temporary pay cuts, but the city
council still has to decide whether to lay off any police officers
or firefighters to further narrow a shrinking $4.7 million deficit,
city officials said.
Two of the city’s four unions are expected to avoid layoffs by accepting furlough days and temporary pay cuts, but the city council still has to decide whether to lay off any police officers or firefighters to further narrow a shrinking $4.7 million deficit, city officials said.
In a closed session Wednesday night, the council voted 4-3 and 5-2 to accept proposals from, respectively, the Gilroy Managers’ Association and American Federation of State, County and Municipal Employees Local 101 – Gilroy’s largest union with 100 members ranging from city engineers to emergency dispatchers – according to Human Resources Director LeeAnn McPhillips. Councilmen Perry Woodward and Craig Gartman voted against both proposals, and Council member Cat Tucker joined the pair in rejecting the managers’ proposal.
Details of the proposals remain sealed until the union members approve the agreements – which AFSCME did Thursday – and the council formally accepts them Monday or the week after. However, sources said they each cut costs mostly through delays in raises and furlough days, though it is unclear how frequently they would happen and how many employees would take the unpaid days. AFSCME employees also voted Thursday to forfeit a previously agreed-upon 4 percent raise over the next year, worth about $400,000
Not paying AFSCME’s employees for one day would save more than $22,500 in salary and benefits costs, AFSCME Business Agent Tina Acree said, but would also effectively close down City Hall. If AFSCME employees were on furlough once a week, the city would save about $1.17 million annually.
Officials with knowledge of the negotiations also said the two proposals fell short of the council’s demand for each union to cut 16 percent of personnel costs, and Tucker said she rejected the managers’ proposal because she was looking for permanent pay cuts. Other city representatives said the GMA’s proposal was closer to 10 percent and AFSCME’s proposal was closer to 13 percent, totaling at least $1.5 million together. The approved AFSCME proposal avoids 13 layoffs and GMA’s proposal, provided the union approves it, spares the four of its 23 members – who range from fire battalion chiefs to budget officers – who were slated to be cut, sources said.
By June 8, when the council votes on next fiscal year’s budget – which begins July 1 – Mayor Al Pinheiro said he hopes to have resolutions with The Gilroy Police Officers’ Association and Fire Local 2805.
“You now have two unions that have been able to meet the council’s request,” Pinheiro said. “I certainly hope the other two will do the same.”
After the council deals with all the unions, the body will discuss cutting wages of Gilroy’s un-represented employees, who include the city clerk, City Administrator Tom Haglund – who earns more than $200,000 a year – and McPhillips. McPhillips voluntarily returned an $8,000 raise she received in January, the same month 48 full-time employees lost their jobs.
“We need to be a part of the solution, too,” McPhillips said Thursday, adding that agreements with police and fire could affect potential cuts at the top of City Hall.
Local 2805 Representative Jim Buessing said he was glad to hear two bargaining blocs reached a deal with the city, and he said his team would continue negotiating with city officials Friday and possibly over the weekend to reach a solution for the council to approve Monday night.
Buessing would not detail his unions proposals, but a 16 percent cut to the 33-member union equals about six firefighters. Four firefighters and other support staff were among the 48 full-time employees across the city who lost their jobs Jan. 31, bringing Gilroy’s workforce down to 227 people. Police Representative Mitch Madruga also would not detail his union’s proposal, but a 16 percent cut equals about 10 of the department’s 57 sworn officers.
No officers lost their jobs in January, but two took jobs with the Watsonville Police Department earlier this month amid uncertainties surrounding their positions, which will remain unfilled, Police Chief Denise Turner said. As he was walking out of the station Thursday morning, Sgt. Jim Gillio said he and his colleagues were still concerned. Councilman Dion Bracco said the council’s decision to accept two union proposals showed its commitment to its employees.
Without going into details about the AFSCME and GMA proposals the council approved, Woodward said he rejected them because furloughs only create temporary cost reductions to help narrow next year’s expected deficit of $4.7 million. City Administrator Tom Haglund is also recommending Gilroy’s fiscal calendar span two years, which would likely extend furloughs until July 2011 and bundle the $4.7 million shortfall with the following year’s expected deficit of $4.5 million. Both budgets have about $37 million in expenses.
“I feel that we’re going to have a major problem down the road,” Woodward said, adding that even city finance officials have said they expect worsened economic conditions through at least 2011. Sales tax receipts have fallen off by more than 18 percent, or $2.6 million, over the last year, and Haglund has warned that property tax revenues will fall nearly 15 percent, or $1.4 million, next year as more residents re-value their homes. The state could further knock property tax receipts if lawmakers borrow $1.2 million in local property revenues – which staff expect to total $8.4 million next fiscal year – Haglund said.
While Gilroy has typically relied on its robust reserve fund to resolve financial hiccups, council members have said they are unwilling to further drain the rainy day fund after a $4.7 million hit last year and an expected $8.4 million reduction this year. The fund will hold about $13.6 million next fiscal year, or about 36 percent of expenses. The fund will also have to cover any general fund shortfalls left after union talks.
