Marty: A proposal to reduce public worker costs

Last week’s decision by the board of supervisors to send advance
layoff notices to a program manager and two correctional officers
at the county jail caused a small explosion, but this should not
have been a surprise.
Last week’s decision by the board of supervisors to send advance layoff notices to a program manager and two correctional officers at the county jail caused a small explosion, but this should not have been a surprise. I admit to being one of the volatile chemicals in the mix. My “issues” have nothing to do with the argument’s merits – rather, my distaste for the tactics employed by the union’s political arm in the past and present. Enough said about that.    

Public agencies have been racing downhill toward this cliff for a long time; the nation’s dire economic conditions have just made for a steeper hill and a speed increase. After pounding each other for years and swimming in lakes of red ink, the City of San Jose and their firefights are about to sign a two-year agreement that will reduce personnel costs by 10 percent across the board in exchange for a moratorium on additional layoffs.

That battle cost both sides lots of cash and goodwill; more important, it eroded the public’s trust. Now they will do what they had to all along. How about if our county skips the bad part and goes right to solving the problem? The other option is to keep doing what we are doing and hope that the results will change somehow.

The county and all their employees should work out a two-year deal designed to reduce personnel unit costs 7 percent across the board in exchange for a moratorium on economically driven layoffs.

The county’s recommended FY2010-11 budget had an annual cost of $43 million for all salaries and benefits covering 472 employees. Hopefully, there are no other personnel costs hiding somewhere else – if so we need to find them and throw them in the pot. An across-the-board 7 percent savings would yield $3 million annually.

Start by documenting the actual salary and benefit costs for each employee. Each employee will then take a reduction on that cost based on a sliding scale that reflects the employee cost to the county. Those near the top will take a 9 percent cut, those near the bottom a 5 percent cut and those in between proportional amounts in 1 percent steps. With a simple spreadsheet, the cuts can be distributed proportionally to equal an overall savings of 7 percent.

If CalPers allows it, the cuts should be distributed to retirement payments because that will not reduce take home pay. Otherwise, additional contributions, which are the same as cuts economically, will come from the employees. Apply the cuts and costs in the way that is most tax efficient for the employees.

In exchange, the county puts a floor on the workforce size by employee class for two years. They retain $1 million of the savings annually to add to the county reserve. The other $2 million goes to the General Fund to offset the cost of the curtailed layoffs. I estimate that 23 to 24 jobs can be saved at reduced costs.

Continue all expiring contracts until the end of the two-year period and cap COLA at 2 percent per annum during this time. Suspended step increases, but allow promotions. Those promoted should be able to take their increase at the reduced rate and new sliding scale if they pass over an increment unless they would lose money on the deal. We need a ‘stop-loss’ provision here. The calculations for those who have taken freezes or cuts in the last 2 years should start at the pre-freeze or cut number; it would be unfair to have them take a cut on top of a cut.

At the end of two years, we can see where we are. The temporary agreement will expire and everything goes back the way it was. No, people will not be recovering their givebacks but they will have had a job and most of their salaries and benefits; it would be like a two-year timeout.

Now, all they have to do is get the bean counters to work the numbers then the board will get everyone to agree to this deal – simple as pie. Let the rock throwing commence. 

Marty Richman is a Hollister resident.