In addition, discussions about what form a second 5 percent reduction might take are underway.
The 5 percent reduction recommendation would save the City an estimated $2.35 million in all funds and $1.5 million in the General Fund.
“At this challenging time when the City is preparing for a significant number of lay offs, all of us need to be part of the solution,” said City Manager Debra Figone. “I want to make sure the City’s executive management employees are showing leadership on this issue.”
The announcement affects approximately 240 employees, including senior staff, executive staff and senior managers under the City Manager’s appointing authority. These employee groups also include some professional and management employees that work in the offices of the City Attorney, City Auditor, City Clerk, Independent Police Auditor, and Redevelopment Agency, as well as some unrepresented non-management employees.
The recommended concessions would equal an ongoing 5% total compensation reduction and include pay cuts and higher employee cost sharing for health care. The City will continue discussions on how to reach an additional 5% reduction goal set by the City Council in March.
The City is seeking reductions from all City employees, most of whom are represented in bargaining groups. To date, the City has not reached agreement with any bargaining units.
The City Manager’s recommended compensation and benefit changes include a 4.75% reduction in pay. For employees in Unit 99, it also would freeze performance-based pay increases for the second year in a row, through the 2010-2011 Fiscal Year. Employees in Unit 99 are exempt employees and therefore do not receive overtime. For employees in the City’s unrepresented non-management units, it would freeze step and merit increases for one year.
The change would also require City employees in these employee groups to pay a higher share of healthcare premiums and higher co-pays and would reduce the maximum amount of sick leave payout.
The agreement will go to the City Council for approval on April 27, 2010. If approved, changes would take effect June 27, 2010.
The City is currently facing a $116 million budget deficit.