There is some low hanging fruit the Manteca City Council is not picking in its bid to reduce long-range pension costs.
And it is as easy to do as mowing a lawn.
Manteca’s leaders back nine years ago unwittingly imposed a heavy burden on buyers of homes in neighborhoods included in landscape maintenance districts (LMD) when they bought into a city staff plan not to preserve public services as much as to preserve municipal jobs.
Up until the budget ax was ready to fall due to decreasing revenues, the official line from 1001 West Center Street was that the city could not run LMDs as cost effectively as contracting the work out to private sector landscaping firms. It’s amazing how a big difference that the prospect of having to cut back government jobs can make in the thinking of top level bureaucrats.
The city’s budget solution was to terminate contracts with private sector firms to maintain what was back then 38 LMDs and to shift parks employees either full-time or a part of their time doing LMD work.
Even though the private sector paid their employees less and therefore had more workers, the city was able to use less higher paid workers and to find innovative ways to reduce costs although more than a few jaded homeowners in the LMDs at the time believed the city had really been overcharging them all along.
So what is the harm of higher paying city workers doing what private sector workers making barely above minimum wage? The answer is five words: Pensions and post-retirement benefits.
The hourly cost of city workers who do LMD work includes all payroll costs. The LMD is — or should be — liable for all costs it generates including unfunded pension liability. If not, then future general funds are being burdened with costs incurred for a non-general fund account.
Sooner or later the cost to an LMD is going to break the proverbial bank as homeowners paying the fees won’t be generating enough revenue to pay for the cost of current and retired LMD workers covered by city pension programs.
No one is saying city workers handling LMD work aren’t doing a good job. That’s not the point. The city’s mission is to provide services, not higher paying jobs.
If there was nothing morally, ethically or legally wrong with the city hiring a private contractor to mow and trim grass and do other landscape maintenance functions in 2007 who paid workers $9 an hour there shouldn’t be a problem paying a private sector worker to do the same thing in 2018 for $11.50 an hour. That’s considerably less than what a city worker is paid and it comes without the added burden of unfunded retirement liability.
The City Council doesn’t have to toss existing workers aside to go back to how LMDs once operated in Manteca. They can simply instruct staff to start phasing out city workers doing LMD work as retirements and departures happen as well as when growth justifies new parks maintenance positions.
The City Council can go a step further and require that all future LMDs and the landscape maintenance portion of new community facilities districts be contracted out to private sector firms.
The first obligation elected leaders should have is to provide effective and efficient services for the community. While it requires paying municipal workers decently and fairly, it doesn’t mean the city should over pay for jobs that can be done just as well by lower paid private sector workers especially when they are passing on 100% of those costs to a specific grouping of property owners.
This is not a proposal to privatize city services. This is a proposal to return to responsible government.
There was a reason that LMDs had their work contracted to private firms out of the gate. It was determined to be cost effective to do so.
For a decade the city sang the praises of the private sector firms while at the same time charging the LMDs part of the cost for the city overseeing the LMDs to make sure everything was being done to the required standards.
This will require council action to set in motion as it is clear that what motivated the change in the first place was the elevation of protecting city worker jobs above the needs and pocketbooks of the taxpayers. It can be done without eliminating jobs via attrition and growth.
No argument can be made that it wouldn’t be cheaper to switchback to contracting the work out unless, of course, there is a slight of hand going on with accounting and everyone else in the city is already on the hook for unfunded pension liabilities of those municipal workers paid 100% or in part by a LMD.
Again we are talking about basic landscape maintenance jobs.
They have never been viewed as being much higher than minimum wage jobs.
And while it is impressive that the city does more with less workers who are paid more by using ingenuity such as more aggressive use of preventative weed control measures, such a stance conveniently ignores unfunded pension liabilities.
At the very least the Council should require the city to submit a bid to handle LMD work on an annual basis in a process that is opened to all comers.
And if the city can do it the cheapest while covering all costs including unfunded pension liability, then they should get the job.
As things stand now it is most likely the current course of action is adding a crushing long-term retirement cost for workers paid significantly more than the ones they replaced in 2009.