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How cutting pay of some workers won’t help city with its deficit

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POSTED September 30, 2009 1:59 a.m.
The guys who pick up your garbage can’t figure it out.

Nor can the folks, who make sure your wastewater is treated properly, nor the people who keep clean water flowing through your taps, and not even the men who groom the greens at the Manteca Golf Course.

They are all being asked to take pay cuts to help the City of Manteca deal with its deficit. Share the pain, as it were.

There’s just one slight problem with the entire premise. Taking an actual pay cut by having those employees contribute more to their retirement and giving up uniform allowances for two years and forgoing pay raises already negotiated for 2010 and 2011 doesn’t improve the general fund bottom line by a single penny.

Why? Well, the four municipal divisions – sewer, water, refuse, and the golf course – are enterprise funds. That means ratepayers and not taxpayers pick up the tab.

The general fund doesn’t pay for any of the functions – except a $155,000 infusion of general fund money to subsidize lower adult and then play at the golf course as a recreational expenditure.

The cost of the uniform allowances as well as back-to-back annual 4 percent pay raises have been already figured into the municipal rates for those services.

So what you have are city employees who are paid from enterprise accounts being asked to take a double digit hit in their compensation for the next few years to share the pain with their comrades in city operations covered by the general fund.

It sounds nuts, but maybe not.

The Operating Engineers, as an example, negotiated a four-year contract for their members who are employed in enterprise as well as general fund accounts. The city, in its desire to play fair, is actually giving itself the black eye instead of forcing the union to choose among members. It’s the type of thing that tears unions apart when one gets something more than the other.

However, there is a practical issue here. Why should a worker and their family suffer when the city is in a position to honor their contract for their specific job since it is an enterprise account? How does that help the guy or gal who is paid out of the general fund?

It is something that has most city workers scratching their heads as the mid-October date looms to either accept concessions asked by city leaders or face layoffs of up to 54 workers.

There is also the question of economic stimulus. At the start of the 2009-10 budget year there were 85 enterprise fund positions. Most of the rank-and-file city workers actually live in Manteca compared to many in upper management who don’t. What impact will it have on the local economy if 85 families have about 14 percent less to spend than they were already counting on through the end of 2012?

That hurts taxpayers who depend on local business for their job or their living. Meanwhile, those same taxpayers as ratepayers keep paying the same amount on their bills for sewer, water, and garbage although labor costs decrease by 14 percent. Labor is consistently the top three – if not top two – costs of running any municipal department.

What will happen to the excess money? Will it go toward stepping up the time frame for construction work that needs to be done or perhaps help pick up part of the $3 million tab for new cleaner burning garbage trucks if the San Joaquin Valley Air Pollution District forces the city to go that route? If that’s the case, you could argue that it will help keep future rate increases lower but there’s a problem with that. The City Council hasn’t made a policy decision yet that is exactly what is happening at least by default.

As far as making the reserves in those accounts more robust, there is something ominous about the city hoarding money in such accounts at a time like this beyond what they historically have put away. To increase your reserves to cover rainy days when you’re in the middle of a financial storm is incredulous.

Of course, this isn’t the first time “sharing the pain” has crossed into enterprise accounts. The furlough now in place – the 4 percent pay cut – included enterprise workers.

And to top it all off, some of the employee groups’ claim they are being strong-armed with the threat of privatization if they don’t agree to the city’s request for compensation concessions.

Again, the city may simply be taking the stance treating everybody equally keeps everyone happy as in “we’ve-hit-the-iceberg-but -we- are-all-in-the- lifeboat-and-not in-the water-although-some-of us-were-never –on-the-boat-in-the-first-place-so-we’re-putting-you-out-to-float-to-share-the-pain” type of thing.

The city’s share-the-pain equally approach may have been designed to keep peace in the family and it may prevent the union from ripping itself apart but it isn’t playing well with the folks in sewer, water, refuse, and  the golf course grounds crew.
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