- QUESTION: What if the city sells the 55,000-square-foot Qualex building they bought at 555 Industrial Park Drive for $3.6 million for use as a police station that now would be costly to operate because the state changed the rules on holding cells in city jails and now requires 24/7 staffing that would cost $600,000 annually when a new facility is moved into? Couldn’t that money go to the general fund and be used to pay employees including police even if the city gets only 39 cents on the dollar?
- ANSWER: Unfortunately, it can’t. The building was purchased with redevelopment money. Under the law, the proceeds when it sells must go back to the RDA account which cannot be used to balance the general FROM PAGE 1. The state, however, has demonstrated they have no problem with taking RDA money from cities to balance the state budget despite a court ruling to the contrary. As City Manager Steve Pinkerton has noted, the state simply rewrites rules to get around court orders.
Municipal employees – with the exception of the Manteca Police Officers Association – have made an average of $11,510 per worker in general fund compensation concessions over the next two fiscal years.
The give-backs – the bulk of which is in forgoing 4 percent negotiated raises for calendar years 2010 and 2011 – were made to avoid layoffs and to maintain service levels. The dollar amount municipal employee groups kicked back to the general fund will exceed $3.2 million. The actual savings are far higher when enterprise accounts such as sewer, water, and refuse are taken into account.
The concessions were made by 278 of the city’s 350 municipal employees.
The give backs are part of an effort to trim $2.5 million from the municipal budget to erase a deficit for the current budget year. The city still has $700,000 to cut to balance the budget. The deficit started at $14 million before other cutbacks – including a previously agreed upon 3.7 percent furlough by all municipal workers – went into effect July 1. Employee compensation accounts for 85 percent of the general fund expenditures.
will reconsider position
On Saturday, Manteca laid off 12 police officers as the MPOA opted to keep money in their pockets as well as protect the back-to-back negotiated raises of 4 percent per year instead of avoiding layoffs.
Manteca Mayor Willie Weatherford Sunday said he is hopefully that the union will reexamine the numbers and that the 12 officers will be able to return to work.
The mayor said the same thing happened in Modesto where officers – grappling with the compensation numbers – declined that city’s similar type of offer leading to layoffs. The officers were eventually hired back when the Modesto union agreed to the terms.
“It’s reality, we just don’t have the money,” Weatherford said.
Officers were being asked to forgo the future raises as well as suspend their uniform allowance of $1,000 annually for two years and pay some into their retirement. The city contends the out-of-pocket cost for an average officer who earned over $110,000 in 2008 would be $118 every pay check as retirement contributions are pre tax.
Public safety employees – police and fire – can retire a number of years earlier than other workers using the Public Employees Retirement System.
It is why Manteca is paying 26.1 percent of an officer’s base salary into PERS this year. That is projected to jump to 27.6 percent in 2010 and 30 percent in 2011.
Municipal contracts call for a firefighter or police officer to receive an annual retirement based on 3 percent of their annual salary times the number of years they work. Given that public safety employees can pull down full retirement after 30 years on the job, that means they’d get 90 percent of their salary.
That means a public safety worker making 30 years whose salary is $75,000 in their final year would receive $67,500 annually in retirement. That is $5,500 higher per year than the median household income for a working Manteca family.
By changing the ratio to 2 percent per year worked, someone working 30 years that qualifies for full retirement would get 60 percent of their annual salary in retirement or $45,000.
are budget breaker
The rising cost of retirement – led by the public safety – is the main culprit behind the structured deficit of the last seven years.
The mayor noted that “personally I think it is going to get worse” when it comes to revenue for local governments throughout California. With a $1.1 billion hole in the state budget already 10 weeks after a deal was made, the prospect is high that the state will look to take local money again.
Although none of the enterprise accounts are in deficit mode as the general fund is but due to cost pressures led by energy and new environmental standards such as the pending California Air Resources Board rule on cleaner burning garbage trucks that would cost in excess of $3 million to improve, the accounts are in danger of having costs get out-of-line. Sewer, as an example, which was projected to be in solid shape with rate increases already approved over the next three years could be impacted severely with double-digit delinquency rate in residnetial accounts.
The city has put in new policies that require renters to provide the city with a copy of their lease before services are turned back on. That prevents someone from defaulting, having their water cut-off and simply having someone else who lives in the house using a different last name reopen a new account saying they just moved in.
To contact Dennis Wyatt, e-mail firstname.lastname@example.org