City Manager Delivers Bleak Outlook
Posted by Comments (35)on Monday, April 25, 2011
Editor’s Note: The following is a letter that was sent out last week to city employees from City Manager Debra Figone. In the letter, Figone explains the current budget crisis. San Jose is expected to have a deficit of $115 million for the next fiscal year. Even if all workers agree to a 10 percent cut in total compensation, Figone writes, almost 620 jobs will still need to be eliminated. The last day on the job for many of these people would be June 25. Figone will be unveiling her proposed budget on May 2.
Dear City Employee –
I am writing to update you on the City’s budget effort, and what you can expect over the next two weeks. As always, my goal is to keep you informed so that you don’t first learn of decisions that affect you by reading about them in the newspaper.
I know that you are aware of our current budget problems, so it will come as little surprise that the budget we will be releasing on May 2nd will include significant workforce impacts. The current projected budget deficit for the next fiscal year now stands at roughly $115 million. Although none of the recommendations will be finalized until the City Council approves a final budget on June 14, I think it is important that you know the magnitude of our situation now.
While the budget details are still being finalized, I expect the proposals to include program reductions that will require the elimination of more than 400 positions. These are on top of approximately 220 positions already scheduled for elimination as a result of last year’s budget decisions. And we expect more than 230 more employees to be impacted through the bumping and seniority process. In addition, the Proposed Budget will include a set of Tier Two reductions. The Tier Two position eliminations would be triggered to the extent we are unable to achieve the 10% across the board ongoing total compensation reductions (as well as the roll-back of any general wage increases received in 2010-11) as directed by the City Council.
I recognize the magnitude of these numbers and understand the impact this will have on the individuals involved as well as the organization as a whole. I ask that all of us be sensitive to our fellow employees and understanding of what they are experiencing as we begin the process of moving through what will be a very difficult transition.
I am sharing this information now because starting next week we will begin notifying most employees who will be impacted by these recommendations. The one exception to this schedule is that employees who could be impacted through the seniority/bumping process associated with Tier Two eliminations will not receive notification until the second week of May. For those employees being laid off, their last day on the City payroll will be June 25, except for employees represented by the Police Officers’ Association whose last day will be June 30.
These decisions are not taken lightly, but the current state of our revenues and expenditures are such that significant reductions are simply unavoidable.
Without the cooperation of several employee groups to date, the impacts would have been worse. I want to thank the San Jose Fire Fighters Local 230; the Association of Engineers and Architects, IFPTE Local 21 (AEA); the Association of Maintenance Supervisory Personnel (AMSP); and the City Association of Management Personnel, IFPTE Local 21 (CAMP), who have agreed to a 10% ongoing total compensation reduction, in addition to other reforms. The agreements, along with similar reductions for all employees in Unit 99, were approved Tuesday by the City Council. These concessions have avoided the need for even more recommended reductions.
While work continues on finalizing details of my recommendations, I will be holding a StraightTalk About the Budget meeting at noon next Monday (April 25) to talk about the proposals I expect to be recommending to balance the budget. This will be an opportunity for you to learn more, ask questions, and get answers. I encourage you to attend, and as always you can get more information through the StraightTalk website on the Intranet.
More discussions will take place before the City Council makes final decisions and adopts a budget in June. While transitions are never easy, it is my hope that we can find long-term budget solutions that will put the City on a fiscally secure footing. Again, I thank you for your understanding and your professionalism as we work through this difficult transition.
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