A proposed pay cut to the city’s top earners narrowly passed Tuesday night —drawing a clear line between the San Luis Obispo City Council members who feel that the city is doing enough to cut expenses and those who don’t.
A 3-2 vote, with Councilwoman Kathy Smith and Councilman Dan Carpenter dissenting, passed the $807,000 cut in annual pay and benefits to the city’s top managers and unrepresented employees.
Smith chastised City Manager Katie Lichtig, whose total compensation was reduced by $39,500, for not doing enough.
Lichtig earns $221,500 in base salary.
“I am disappointed with the level of concessions offered,” Smith said. “I expected more of our city manager.” Carpenter said the cuts did not go far enough and said he was concerned that the bar was being set too low for ongoing negotiations with employee unions.
San Luis Obispo’s top managers have agreed to forgo any salary increases for two years and to reduce their compensation by about 8 percent to achieve the savings.
The 73 affected employees including Lichtig, City Attorney Christine Dietrick and nine department heads will, under the new agreement, begin paying the employee portion of their retirement contribution to the state retirement program — something that has traditionally been paid by the city.
That contribution is 8 percent for everyone except for police and fire employees, who will pay 9 percent. Lichtig also agreed to permanently eliminate a $450 monthly car allowance included in her contract. Lichtig first waived the car allowance this year.
Mayor Jan Marx came to the defense of the city’s management employees.
“Not only did they do what we asked of them, but they exceeded it,” Marx said. “They are doing their darnedest to succeed.”
“This is a very positive statement, and it is going to empower city staff to do the negotiations needed to achieve our goal. That is really significant and should be applauded by everyone on the City Council,” Marx said.
Management reductions are the first amended employee agreement to be accepted by the council and are intended by the city’s top leaders to sway employee unions to make similar cuts in compensation to balance the city’s budget.
Negotiations with the city’s unions have been ongoing since September. All union contracts except for police management expire at year’s end.
The city plans to negotiate about $3.1 million in employee compensation cuts, or 6.8 percent per employee. In June, the City Council adopted a two-year spending plan that cut $4.4 million in the first year from the city’s $99 million budget. The cuts eliminated some employee positions and reduced city services.
The balanced budget is dependent on the employee compensation cuts being negotiated. If agreements cannot be reached, additional cuts to city services will be made.
A breakdown of annual savings
City Manager Katie Lichtig $39,500
City Attorney Christine Dietrick $23,800
Nine department heads $142,000
Other management employees $602,000