In an attempt to hold down labor costs, supervisors Tuesday approved three significant changes to the county’s employee-compensation rules.
The rules deal mostly with how the county negotiates with its unionized work force. Eighty-five percent of the county’s 2,300 employees are represented by a union, and labor costs account for 60 percent of the county’s budget.
The rule changes come as the county struggles with a fourth year of budget shortfalls. This year’s revenue gap is at least $9.2 million, and three more years of challenging budgets are expected, said Dan Buckshi, assistant county administrator.
The most significant change approved Tuesday is a new two-tier pension plan. Employees hired after the first of the year will receive lower pension benefits.
Although it could take eight to 10 years before savings are realized, payroll costs could go down by as much as 10 percent. This could eventually save the county $15 million to $20 million annually, said Tami Douglas-Schatz, county human resources director.
In another significant change, the county will revise how it implements its voter-approved prevailing wage ordinance. Under the ordinance, the county bases its salaries and benefits on comparisons to other local public agencies and neighboring and demographically similar counties in California.
In recent years, this practice has resulted in formulaic pay increases of 2 to 7 percent in spite of tough economic times. Under the new guidelines, labor negotiations will take into account the county’s financial state, Douglas-Schatz said.
Finally, the county will bargain to have employees contribute an equal share of pension costs. The percentage the county now pays varies depending on when the employee entered the pension plan, but is greater than the employee’s share.
Gere Sibbach, county auditor-controller, praised the changes as a good effort to keep costs down. He noted that, compared to Santa Barbara and Monterey counties, San Luis Obispo County residents pay fewer taxes and still get good services.
According to Buckshi, the county has avoided dramatic cuts to programs and services while its work force has been trimmed by 10 percent without layoffs.
Supervisor Adam Hill said the county is ready to defend well-paid and well-benefited employees who do good work.