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Wednesday, January 23 , 2019, 7:41 pm | Fair 51º


Santa Maria City Will Ask Workers To Take Time Off Without Pay

Council also agrees to hire consultant to poll voters on support for Measure U tax renewal in 2018

The Santa Maria City Council agreed this week to ask city employees to take voluntary time off without pay as part of its efforts to overcome a budget shortfall. Click to view larger
The Santa Maria City Council agreed this week to ask city employees to take voluntary time off without pay as part of its efforts to overcome a budget shortfall. (Janene Scully / Noozhawk photo)

Facing an unbalanced budget, the city of Santa Maria will ask its employees to voluntarily take unpaid time — off before considering making it mandatory — as one of several efforts to trim expenses.

The Santa Maria City Council heard a mid-cycle report this week on the two-year budget from City Manager Rick Haydon.

While the city’s budget outlook is not as bleak as its counterparts, Santa Maria will need to ask employees for concessions, Haydon said, much as it did several years ago during the economic downturn. 

Councilman Jack Boysen asked if employees would lose the gains made since the previous round of mandatory time off and salary cuts.

“As hard as it is to answer that, my assessment would be yes,” Haydon said. “In order for us to balance the budget, I think everybody’s going to have to work together.”

With a total spending blueprint of $162.5 million for all accounts, Haydon presented a $69 million general fund budget, with a $3 million revenue shortfall. 

That gap would actually be closer to $5.7 million, but the city will use $2.7 million from its reserve fund, which is made up of one-time revenue set aside for emergencies. 

Haydon said city departments have been asked to trim expenses, leading to $370,000 in savings.

Additionally, vacant positions will remain empty for some time so salary savings add up to ease the gap. 

But Haydon said he intends to approach employee bargaining groups to reach a consensus on possible concessions to make up the rest of the financial shortfall. 

As the city offered before, Haydon said he intends to ask city workers to volunteer to take time off without pay.

“Essentially they would be furloughing themselves,” he said.

If that voluntary program doesn’t achieve the goals, the city would have to look at mandatory time off. 

“When we’re talking about concessions, pretty much everything will be on the table,” Haydon said.

He said he expected to bring back a resolution for council approval July 18, instituting a voluntary time-off policy. 

Previous furloughs led to a 5-percent salary savings for funds covering most of the employees and 4-percent for public safety workers. In all, the effort saved $1 million.

One option, as some agencies did, would be for furloughs to occur between Christmas and New Year’s, with only essential employees on the job. That would generate 1.5 percent in salary savings, Haydon said, adding that employees wanting to get paid could use it as vacation time.

“This is going to be difficult no matter what we do,” Councilman Mike Cordero said.

Much of the city’s financial woes, like its counterparts throughout the state, stem from participation in the California Public Employees Retirement System or CalPERS, which warned of escalating pension costs amid a lower return on investments after a decision against investing in some industries such as tobacco and alcohol.

As of 2015, the most recent data, the city Fire Department had 56 active CalPERS members, compared to 42 retired firefighters in the system.

In the Police Department, the city has 117 sworn employees in CalPERS compared to 124 retirees. 

“So we have more retirees receiving a retirement check from CalPERS than we do active employees paying into the system,” he said. 

For miscellaneous employees, some 376 full-time employees are paying into the system and slightly fewer receiving are retirement checks. 

According to a CalPERS analysis, the system had two active employees for each retiree. In 2016, the number fell to 1.3 active employees for each retiree.

By 2026, CalPERS estimates say there will be one-half active employee for each retiree.

In the future, the city will need to take more advantage of technology and efficiencies to further streamline operations, Haydon told the council.

“The question is is this an acute problem from a financial perspective? I would say the answer’s no,” he said, adding that his colleagues in California would say it’s a chronic problem that needs to be addressed.

In other budget matters, the City Council agreed to hire a consultant to explore whether to put the Measure U half-cent sales tax for public safety on the 2018 budget although its previous approval doesn’t expire until 2021.

Noozhawk North County editor Janene Scully can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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