As a member of the Citizen Budget Committee, I take the task seriously. I’m not sure all members of the Committee do. My Committee role I believe is to help provide the services citizens want at the lowest possible cost. That provides good stewardship of our tax dollars.
During a recent Committee meeting I made a motion to reduce our City employees by 2% a year for the next 3 years. My motion was defeated 5-8 with all the City Council and the Mayor voting against it. Let me explain my motion and why I believe it is very important to every taxpayer.
City headcount peaked at 363 in 2012/13. Since then it has dropped to 347, a reduction of 16 or 4%. But of concern is the plan for the coming fiscal year. The plan is to drop to 344.8 (from 347.3) a drop of 2.5. That seems good but it is not. There is already a drop of 3 in the Water Project as it winds down. But since the overall headcount is only going down 2.5 there is actually an increase – half an FTE. But half a person does not seem like much. But now let’s get to the rest of the story – cost per employee.
In 2011/12 an average City employee cost $108,000. For the 2016/17 budget the number has reached $131,800 an increase of $23,000 a year or 21%. Headcount is dropping slowly but our cost per employee is rising much faster!
Employee costs are over 80% of our City’s total budget. Benefits are approaching 75% of salary and are going to increase. PERS is expected to rise at 7% a year and healthcare is going up as well.
Our City is going to reach the point where taxes will have to go up to pay for employees. In fact, the City Manager hinted at this in one of his presentations to the Budget Committee.
We say we have needs – more street maintenance, park maintenance, etc. But we also say we do not have the money for these activities. Why don’t we have the money? Because our City leadership, the Mayor and the City Council, has not made cost management a priority.
Opportunities for cost reduction abound based on my experience in business. For example, the routine commodity work of cutting grass and trimming bushes could be outsourced (and partially are). Why does it make sense to spend over $130,000 a year for someone to cut grass (it may actually cost less depending on the salary of an individual employee)?
Talking to a member of a Board overseeing a City function, I learned that department managers will NOT take action to reduce costs unless told by the City Manager to do so. But why hasn’t the City Manager installed a cost reduction program?
Because our City Council and Mayor have not made it a priority. Look at their priorities for this year – is cost reduction there? Why not?
Some argue that any reduction in head count means a reduction in services. Such a statement demonstrates their incompetence. We could eliminate all doing job “x” and replace them with an outside firm; there would be no reduction in service.
By not initiating a cost reduction program, a tax increase will not be too far off.
Published in The Review on June 23