The city of Atascadero agreed with its employees to unanimously cut cost-of-living raises and increase pension contributions from take home pay through 2013 to help fill the city’s $2.1 million budget gap.
The city's nine department heads were also forced to lessen their take-home pay with increased pension contributions by the same percent as their employees. While the annual gross salaries of employees won't be reduced, executives can voluntarily cut their own salaries from 1 to 3 percent through 2013 in addition to what's required in the contracts.
The City Council on Tuesday approved the two-year contracts, which begin Friday and last through June 30, 2013.
The agreement came about two weeks after the council adopted the 2011-13 budget. “Fighting through the mud right now is not what we want to do,” said officer Caleb Davis, president of the Atascadero Police Association. “It was never the idea that we wouldn’t take the cuts. It was just how to do it.”
The council authorized covering the rest of its budget gap with reserves while property and sales tax revenues continue to slide. Earlier this year, the council directed the city to work with worker groups to reduce pension contributions and treat all employees equally when making the cuts.
The contracts represent the first time in recent memory that all four employee groups voluntarily agreed to terms without entering into a formal negotiation process that can go on for months.
It took about four to six weeks for the city to agree to terms with the Atascadero Police Association, Atascadero Professional Firefighters Association, the Mid-Management/Professional Employees Association and the service employees union, SEIU, Local 620. Other nonrepresented employees, such as some staffers in the finance department, will have terms similar to the unionized employees.
Terms agreed on
All 116 full-time employees agreed to eliminate their cost-of-living pay raises — a step they’ve haven’t taken since July 2008. However, merit increases will still be given to eligible employees.
All employee groups also agreed to direct 4.7 percent of their take-home pay toward pensions.
That’s new for the public safety employees, who didn’t contribute to pensions from their salary in 2010.
But it’s not new for all other employee groups, such as secretaries, planners and recreation staff, who will now pay an additional 2.5 percent of salary to their pensions.
The new contracts bring Atascadero a general fund budget savings of nearly $300,000 annually.
“All these employees came together with a pension reform package that balances our budget,” City Manager Wade McKinney said. “It’s terrific leadership among our unions.”
Earlier this month, the city passed its two-year budget that also included continuing its hiring freeze and cutting five vacant positions.
One concession in the new contracts is that employees can now use up to 16 hours of sick time for personal reasons. Sick hours were previously reserved to care for the employee or immediate family members.
Managers take cuts
The city’s executive management team, which isn’t unionized, is continuing its voluntary salary reduction. In fiscal year 2010, the city’s nine department heads took voluntary 3 percent cuts to their total salary via furlough days. Executives now have the option of voluntarily taking between 1 and 3 percent salary cuts until 2013. They can take it through furlough days or from cutting total salary without taking furloughs.
Former Atascadero Mayor Mike Brennler said the voluntary salary reduction for executives is unfair if the cuts are made via furlough days because then they attribute to accrued administrative leave hours that employees could use for future payouts.
“Call it whatever you want, this leave has a value,” he said. McKinney on Wednesday said he would take a 3 percent cut from salary without taking furlough days.
As for the other eight department heads, “everyone is doing something slightly different but every manager will take a larger pay reduction than their employees,” McKinney said.
The two-year agreement also says executives will not receive salary increases through 2013. Their salaries will remain at levels from fiscal years 2008 and 2009.
The projection for general fund revenue is about $15.7 million in 2011-12 and $16.1 million in 2012-13, while expected spending exceeds that by about $2 million in total.