Furloughs Hurt the City

By Kathryn Rhyu "Kathy" McDonald

Furloughs (negotiated, unpaid days off) are not a long term solution to containing labor costs. They hurt all parties involved, but the customer (citizens receiving the reduced services)most. City must take more permanent measures to bring budget into balance.

"The city is facing an $11.4 million deficit in its $133.3 million general fund budget.

To help plug that gap, the city is asking its unions to accept six days unpaid during the upcoming fiscal year, which starts July 1. It's unclear if that means City Hall will close for six days like in Newark or if workers would choose days to take off unpaid."*

A furlough is a way of reducing the total compensation paid to an employee by cutting the number of hours/days worked. It does not actually cut pay rates, or require abstention from contractually scheduled pay rate increases, or even that there should be any equal correlation between the number of days furloughed and the percentage of total pay cut. We don't even know that the financial gain of losing 6 work days / union employee is equal to (or greater than) the hours of work lost.

On the most basic level, this solution is most unfair to the lower paid employees. Losing six working days for them could reduce their pay to a level that creates real hardship to their households. Our employees making over $100,000+/year might easily weather losing six days of pay (and perhaps even relish getting some extra time off), but those less well compensated will bear a comparatively more difficult burden. There should be a more cost beneficial, corrective and compassionate way to balance the budget.

If our city manager gets his salary reduction for City workers through furlough days, he will claim it a victory. He will have reduced spending to meet the new budget, but at what cost? He will have sacrificed the opportunity to realign jobs, salaries and benefits with revenues. Again, he will have balanced the budget on the backs of the citizens of Fremont. This is a short-term, short sighted solution. It does nothing to improve our city's financial position in the long run. It does nothing to improve our crisis with regard to the skyrocketing cost of salaries and benefits packages. We are not paying our pension obligations. It further deteriorates the condition of our city by deferring work and eliminating services. It gives employees another legitimate excuse for not providing needed services (no time). It decreases employee moral and public confidence in the City.

Furthermore, some costs are still inflating because of increased OT, scheduled increases, and continued merit pay. This is a non-decision for management, that should only be used, when all other factors of staffing are aligned and sustainable, and there is a high likelihood that all current staff is cost efficient, high performing, difficult to replace, and will be rehired at 100% in the near future. We do not have this case. This downturn in the economy is an opportunity for Fremont to take the reins and negotiate our salaries and benefits back to a sustainable place. We must take the hard line and stop paying for skills we do not need. We must implement a reduction in force to eliminate our top-heavy overhead and redundancies. Each position must be justified and output evaluated. If we are paying for managers with no reports, those are not managers, regardless of paper qualifications. We can only pay for the function served, not the potential of the worker. Looking at our salary database **, it is clear that our staff in many departments, is clearly top-heavy. If we continue to retain and promote without regard to the need for these promotions, or the need for the functions they might serve, then our salaries will continue to inflate. We will never sustain a model in which cost containment relies most heavily on reduction of output. It will become more and more clear to the recipients of the output that POOR SERVICE IS NOT BETTER THAN NO SERVICE because "no service" is free.

1400+ City employees (nearly 800 full-time), is the only reason we need so many employees. We must review how many of these employees directly serve the public good (do what taxes are supposed to pay for), and how many provide support for other employees (overhead). The goal of this exercise should be that in cutting the fat, he must reduce overhead to create the funds necessary to maintain/increase services to the citizens. Wherever possible, the jobs of the people most directly providing the service, touching the public, should be saved. It is time to use the data to exact fiscal responsibility. The City Manager must review his expenses, and implement more cost-effective, efficient alternatives to GET THE WORK OF THE CITY DONE.

• Matt Artz's minutes of Fremont CC meeting on 5.18.2010: http://www.ibabuzz.com/tricitybeat/2010/05/18/fremont-to-ask-employees-to-take-six-days-unpaid-council-diary/
• *Public Employee Salary Database: http://www.insidebayarea.com/public-employee-salaries