Each week, Louis Dettorre will provide the PublicCEO Staff Report of the Week. Nominate yourself or a colleague by e-mailing ldettorre@publicCEO.com.

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“Employee costs are escalating in the cities of Santa Clara County, revenues are not keeping pace with these increases and cities are cutting services. How do cities contain these escalating employee costs?”

This statement is from a report that came from the Santa Clara County Civil Grand Jury. San Jose City Manager Debra Figone responded to the court’s report and recommendations in the attached staff report.

San Jose responded to each of the findings and recommendations in accordance with California Penal Code Section 933(c) that requires the responding person or entity to indicate whether the findings or recommendations are true and what will be done moving forward.

The summary of the report indicates that “[t]here is widespread concern that the cost of employee total compensation continues to increase while revenues and services decrease” and that, “[t]he overall costs to cities are not sustainable.”

The city agrees that the rising personnel costs have outpaced the growth of the City’s revenues for the last 9 years. From 2000-2001 to 2009-2010, the average total cost per full-time employee increased by 64%, but the revenues during that same time period only increased by 18%.

Figone’s responded to the report with a 33 page staff report with responses to the recommendations.

Some of the long term solutions to high employee costs listed are to renegotiate contracts for existing employees with the unions and to change pension and retiree healthcare benefits for new hires.

Short term solutions included ordering furloughs and to impose temporary wage freezes.

Louis Dettorre can be reached at ldettorre@publicceo.com