2/10/08

Gov't unions worry that the party's over

The city of Bloomington (IL) is bleeding -- and that’s caused some people to see red. A tough economy has forced the city to plug a $3 million hole in its $75 million budget by spring. Officials have pinned the problems on funding police and firefighters’ pensions, finding money to prop up the debt-ridden U.S. Cellular Coliseum and lackluster local sales tax income.

But while the city wrestles with multimillion dollar issues, it spent $13,000 for its annual holiday party and $10,000 for service awards. It allows dozens of city employees to get rides to and from work at taxpayer expense and gives some department heads better raises than the employees they supervise. And it has found money to hire about 75 new employees in the past two years. This is the first time in years the city has wrestled a large budget deficit.

Bloomington resident L.A. Embry thinks the perks should be cut.

“Everyone’s income is tight, and everything is going up,” Embry said. “I don’t think they need it right now. They have good benefits without the rides to work or the parties.”

But Mayor Steve Stockton bristled at the notion that a $13,000 party is a “perk.”

“A perk is something that keeps your employees happy, and in this environment we need to offer good benefits or we will lose some good employees,” Stockton said of the annual buffet dinner at the Interstate Center. “Where do the necessary perks end and the unnecessary perks begin?”

Big projects, big costs

Debating city spending, from parties to the new employees, has led to six months of angst for staff and aldermen as they struggle with the budget and each other.

The council already has approved $1.5 million in cuts, and another $1 million are expected to come before the council in March. To date, spending has been reduced in travel and training budgets, a staff awards dinner, supplies and insurance premium costs.

And while many of the smaller expenses will be studied, some aldermen maintain parties and gifts don’t send the wrong message to the public because they are a small fraction of the overall budget.

“The parties, the gifts all need to be managed, monitored and evaluated, but if you add all that up, it is a small fraction of the city’s budget,” Ward 3 Alderman Kevin Huette said. “The big ones are where the money went.”

Included in Huette’s list of “big ones” are a trio of new facilities: an emergency dispatch center, the Coliseum and the Bloomington Center for the Performing Arts.

But Ward 4 Alderman Judy Stearns disagreed. She thinks not enough has been done yet to examine the lesser costs, including travel expenses, use of city vehicles and cheaper ways of delivering city services.

“We could look much harder,” Stearns said. “It sends a mixed message when we are making some cuts but not looking at others.”

Growing payroll

Together, the large and small expenses have ballooned the bottom line of the city’s general fund — $75 million that pays the lion’s share of daily operating expenses. Its primary revenue sources include $22 million in property taxes, $25 million in sales and local taxes, and about $7 million in state income and replacement taxes. The rest is raised through myriad fees and lesser taxes.

In the past, that revenue has grown with the economy and the city’s population and kept coffers flush.

But in the last few years, sales tax revenue waned and the property tax rate was static. In tandem with that, dozens of new employees were hired, federal grant funding was lost, and state-mandated pension costs increased.

The 2006 opening of the dispatch center added 18 employees and $1.3 million in payroll costs. That same year, the equivalent of 42 full-time positions were added to the Bloomington Center for the Performing Arts at a cost of $325,000.

In addition, six employees with combined salaries of about $82,000 were added to staff the Pepsi Ice Center.

“It all comes back to the new enterprises,” City Manager Tom Hamilton said.

If that wasn’t enough, the city also took on a $500,000 salary cost for 11 employees in the Planning and Code Enforcement Department when federal funding was cut.

A hiring freeze has been implemented as a result of the budget discussions, reducing the city’s payroll of about 840 by nine employees. Hamilton said the city is saving $60,000 a month with the freeze.

In addition, Hamilton said, the city is paying $1 million more for fuel and another $1 million in new garbage dumping fees.

All of those bills have shrunk the city’s reserve account — used for emergencies and to cover bills until other funds arrive — from roughly $19 million in 2006 to about $4.6 million today.

City Finance Director Brian Barnes warned the council during a recent budget work session that reserves are so low, Bloomington would have to borrow money if it had to respond to a natural disaster.

Squeeze on employees

In addition to the next $1 million in budget cuts, Huette and Ward 9 Alderman Jim Fruin want to see costs for the city’s biggest expense — people — shaved. In the past four years, the city’s payroll has grown by about $2 million annually, said Fruin.

But that doesn’t necessarily mean pink slips for employees, Huette said. Costs can be trimmed other ways, including attrition and having employees pay a greater share of their benefits costs.

“This should be an easy place to start when we are talking about an employee base that has an annual 6 percent turnover,” Huette added. “Seventy percent of our budget is personnel. There is no way we can’t address that and still expect to reduce our budget.”

One local resident, Steve Pruett of Bloomington, has watched the council wrestle with its budget. He’s skeptical the costs can be trimmed.

“With so many city employees represented by unions, and those salaries and benefits tied to contracts, the question is: How can you make those cuts?” Pruett asked.

Union frustration

And while no one is suggesting layoffs, city employees represented by the American Federation of State, County and Municipal Employees Local 699 are worried about their jobs, said Michael Jefferson, the union’s regional representative. Local 699 represents more than 150 public service, parks, library and maintenance workers.

“Our biggest concern is that our members face all these budgetary restraints because of a building,” Jefferson said, referring to the Coliseum. In its first year, the Coliseum’s unexpected deficit cost the city $2.5 million; it’s projected to drop to about $1.6 million this year.

Adding to rank-and-file frustrations during recent contract negotiations is the fact some bosses have received more than the 3 percent raise most union members were awarded this past year. Union members also receive another 2 percent increase for anniversaries based on increments of five years.

City Engineer Doug Grovesteen, for example, received a 4.9 percent increase and now earns $103,393 in salary. And Public Service Director Rick Clem received a 5.4 percent increase last year to raise his salary to $91,431. Police Chief Roger Aikin took home a 3.8 percent pay raise, and earns $125,925.

Hamilton said administrative staff raises should be different than union raises. They are based on merit, so some employees may not get a raise, he said, adding they are also evaluated against pay for similar jobs in other cities.

Jefferson said the wage difference between the two groups has never sat well with his members, but they’ve also never been unhappy enough to strike.

“A 3 percent raise on our salaries is a lot different than a 4 percent raise on their salaries,” Jefferson said. “Why is there a double standard?”

How and why

The city of Bloomington is facing a $3 million shortfall in its $75 million general fund for the coming year that begins May 1.

The money

The fund pays daily operating expenses and receives revenue from four primary sources: $25 million in sales taxes; $22 million in property taxes; $7 million in state income and property taxes; and $21 million from other small taxes and fees.

The growth

In recent years, revenue growth allowed the city to add new facilities, including the emergency dispatch center, U.S. Cellular Coliseum and the Bloomington Center for the Performing Arts. Those projects also added 66 employees to the city payroll.

The problem

In the last year, the economy has slowed. Sales tax revenues dropped $1 million in the past 18 months. At the same time, mandated police pension costs increased nearly 27 percent, and fire pension costs spiked nearly 41 percent. The Coliseum faces a shortfall of $1.6 million, down from $2.5 million in 2006-07.

The other costs

A range of other expenses, from the cost of garbage pickup to the annual holiday party, are also under scrutiny.

The task at hand

City officials are now examining a combination of budget cuts and tax and fee hikes to solve the problem. The city council must vote on a budget before May 1.

SOURCES: City of Bloomington, Pantagraph archives

Making money

Raises for city workers vary greatly; union members receive a standardized annual salary increase while city administrators earn merit raises that can be a larger percentage than the union increases. The disparity has been questioned as the city examines a $3 million shortfall in its upcoming budget.

Union contracts

Union...Department...Contract length...Base salary...Annual raises*

Local 362 ...Support staff ...two years ...$9.63-$14.96...3 percent

Local 362...Parking...two years...$12.48...3 percent

Local 699...Library...four years...$5.92-$13.16...3 percent first year, 2 1/2 percent second, third and fourth years

Local 699...Public service, Parks, Maintenance...two years...$21.95-$26.52...3 percent

Local 362...Building inspectors...three years...$14.63-$28.18...3 percent

Local 1000...Water...four years...$20.34-$32.48...3 percent

Administrative Salaries

Supervisor...Title...2005...Percent change...2006...Percent change...2007

Roger Aikin...Police chief...$115,979...4.2...$121,082...3.8...$125,925

Dan Augstin...Director of fleet management... N/A...N/A...$82,776...5.6...$87,742

Brian Barnes...Finance director...$98,362...3.7...$102,100...4.2...$106,592

Emily Bell...Human resources director...$106,146...4.2...$110,817...3.6...$114,917

Rick Clem...Public service director...N/A...N/A...$86,500...5.4...$91,431

Craig Cummings...Water director...$97,344...0...$97,344...8.1...$105,896***

Todd Greenburg...Corporation counsel...$96,130...4.1...$100,263...4.1...$104,574

Doug Grovesteen ...Engineering director...$93,960...4.4...$98,282...4.9...$103,393

Tom Hamilton...City manager...$118,520...3.9...$123,380...0...$123,379***

Mark Huber...Planning and code enforcement director...$81,000...4.7...$85,050...5.7...$90,153

Dean Kohn...Parks and recreation director...$88,000...0...$88,000...10.7...$98,587***

Bruce Marquis...Cultural district executive director...$89,987...4.1...$93,857...4.8...$98,550

Keith Ranney...Fire chief...$101,963...10.8...$114,354**...4.2...$119,386

Scott Sprouls...Information services director...$85,000...0...$85,000...10.7...$95,236***

Tracey Sullivan-Covert...City clerk...$62,029...2.8...$63,828...0...$63,827***

*Salary rates do not include a 2 percent increase workers receive every five years.

** Market adjustment...

*** No evaluation processed previous year.

(pantagraph.com)

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