City Manager Proposing Raising City Employee Benefits
DESERT HOT SPRINGS, CA – When a city is challenged with a $4.2 million dollar budget deficit the recommendation of the citizens finance committee was not to raise taxes. Instead the committee recommended spending cuts and that no more than one third of city reserves be spent to make it through the next fiscal year.
The city has $4 million in reserves and the proposal by city manager Rick Daniels was to burn through them in just one year. The finance committee rejected that as it would leave nothing in the bank for next year and the year following.
Included in the committee’s recommendation was across the board salary reductions of 10%, the solution the city of Palm Springs and Riverside County supervisors adopted in the face of serious budget problems.
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In a bizarre response to the committee’s suggestion for across the board salary reductions, City Manager Rick Daniels called the plan discriminatory. In a written response Daniels said the salary reductions were “discriminatory against women, Latino, African-American and religious individuals.”
Daniels did not explain why he left the protected class of those that are overweight out of his claim that salary reductions was discriminatory.
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Lost Faith
The citizens finance committee also recommended several other changes to the budget plan submitted by Daniels and in a report to the city council wrote that it had “no faith” in Daniels budget plan, especially projections for new revenue Daniels said would be coming.
In response to the committee’s rejection of the plan to spend all $4 million of reserves in one year, Daniels came back with a second plan that he said would consume only $2 million in reserves but that proposal included anticipated revenue the committee said it had not faith would actually be realized.
On the subject of new taxes, the committee said also said no. Summing up the position of the citizens finance committee, member John Gerardi said he is not willing to consider any new taxes until a serious effort is made to curtail spending at city hall. The entire committee agreed with Gerardi’s position.
City Costs Going Up with Daniels
The committee recommendation for a 10% across the board salary reduction put Daniels in a difficult position. At the same time the committee had made that recommendation, Daniel’s was in contract negotiations Daniels with two city employee unions. The city's contract negotiations are conflicted with Daniels as lead negotiator.
The negotiations had been on the council’s closed session agenda for weeks. So far there has been no indication if pay cuts - or pay raises – would be in the offering to city employees. With release of an agenda for the Tuesday July 2 council meeting, Daniels’ irritation and his lashing out at the committee is explained. The city council will be asked tonight to increase the benefits package for city employees.
Rather than reducing the cost to the city for the city work force, Daniels is proposing to increase those costs. The council is scheduled to decide on the increased benefit package tonight.
Pay Cuts or Pay Raises
Councilwomen Jan Pye provided some indication how she will vote tonight during a series of council budget workshops that took place in late May. Pye said she is absolutely against any pay cuts for city employees.
Mayor Yvonne Parks also seemed to rule out pay cuts. "These employees of ours are stretched thin and are working very hard so I just can't see that pay cuts will be justified.”
Two agenda items on tonight’s city council meeting are in keeping with the positions of Parks and Pye. If Parks’ and Pye’s earlier statements are any indication, city spending on city employees will increase starting July 1, 2013.
No Savings
Parks, Matas and Pye, like the city manager, rejected several other proposals to reduce spending, including a proposal to immediately put $4.5 million in annual city contracts out for re-bid as proposed by Councilman Russell Betts. And they rejected several other finance committee recommendations, including revamping the city’s code enforcement program that costs the city nearly $1 million annually. The committee proposed two alternate plans it said would save money while preserving an aggressive code enforcement effort.
Councilman Adam Sanchez who is closely aligned with Betts said several times during recent council meeting that Parks, Matas and Pye are setting the city up for very tough budget situation next year.
“The numbers aren’t real. This budget is smoke and mirrors. It’s going to be the most difficult 12 months if we don't start cutting spending this year, said Sanchez.”
Sanchez attributed the unwillingness of Parks, Matas and Pye to address the budget deficit to upcoming elections. He said the three in control of the city favor increasing taxes to balance the budget but don’t dare say it as they approach election time. “You just want to get past this election and then deal with the problem and its obvious your only plan is to raise taxes but not talk about it now,” said Sanchez. Parks, Matas and Pye are up for reelection this November..
Plotting to Increase Taxes
Betts agreed with Sanchez’s assessment that the three in control of the city are leaving raising taxes as the only option. Holding a report in the air Betts said, "If you are not planning to raise taxes then what’s this report all about and why did we spend thirty minutes during the budget workshops getting a presentation on ever conceivable kind of new tax,” said Betts.
The report Betts referred to was a 28 page document prepared by city consultant Michael Bush of Urban Futures. It detailed 12 different tax options for council consideration that included a history of how each type of taxes faired when put to voters in other cities and how much each tax option would provide in additional city revenue for city hall.
"That report and that 30 minute presentation make it more than clear that all the three of you want to do (referring to Parks, Matas and Pye) is tax and spend, tax and spend.
It was at that point that Matas called Betts and Sanchez liars. "You are lying, I never said I want to tax and spend.
“If you are not willing to take a serious look at spending reductions, you are setting this city on a course for a fiscal emergency and no other option but tax increases,” said Betts. “Your suggestion the city can simply grow its way out of this budget
