Budget reduction to come from city payroll, giving rise to layoff debate
The day after Cape Coral City Council tentatively approved a budget proposal that slashes $6.2 million from the plan previously presented, city employees fear layoffs are in the making.
Although newly appointed City Manager Gary King said twice Tuesday night that he does not contemplate cutting jobs as a result of his amended budget plan that maintains reserves through a proposed 6.7 percent cut in payroll costs, employees don’t believe jobs will not be lost if council gives its final nod to the plan on Sept. 21.
“The city workers as a unit — all of them — are obviously frustrated and demoralized,” said Councilmember Marty McClain Wednesday. “They feel betrayed because they have been made promises, as they conveyed last night. No one has said pointblank there would be layoffs but, just glancing at this budget, that ultimately is what’s going to have to happen.”
King’s amended budget calls for cuts of roughly $3.6 million to be made in police and fire, and “dismantles” parks and recreation, McClain said, adding there will be a significant impact on programs, the water park and the Yacht Club area.
“They’re downplaying it by saying it’s pay cuts but ultimately it’s going to come down to layoffs,” he said.
Councilmember Chris Chulakes-Leetz, though, said Tuesday night that using reserves to adopt next year’s budget would definitely equate to loss of jobs during the 2012 budget cycle.
“If I approve using these reserves this year and it does get worse, how many people will we lose next year?” he asked.
Mayor John Sullivan, who voted to adopt King’s proposal, said reaction he received Wednesday was mixed.
“I’ve gotten some e-mails from citizens thanking us for cutting it,” Sullivan said of the budget. “I haven’t talked to many employees except the girls in the office, and they did not say anything.”
He did get some negative e-mails but those residents don’t realize the challenges of funding the retirement benefits plan, Sullivan said, adding that was his major concern when he voted to retain the reserves.
King’s amended budget passed 5 -3 with McClain and council members Kevin McGrail and Derrick Donnell dissenting.
Employees attending the first public hearing stormed out of chambers in unison Tuesday night, many accusing council of being out of touch with city employees.
“I’m not surprised by the vote,” said Robert Luzarraga, who works for the city’s police department. “They all vote the same way together all the time.”
Speaking about the voting bloc of council members Erick Kuehn, Pete Brandt, Bill Deile, Chulakes-Leetz and Sullivan, Luzarraga said the police department has already taken a 6 percent cut because wages were frozen last year.
King’s new payroll proposal, Luzarraga said, just calls into question the efforts of the police department in their labor negotiations thus far.
“They have the reserves because we helped them to build the reserves,” he said. “We made sacrifices so they could have choices.”
The choice city council faced was whether to use cash reserves to balance next year’s proposed $138 million operating budget. Most of the reserve funds came from savings from the current year budget the previous administration had proposed to roll over into the new budget year, which starts Oct. 1.
That budget, presented by then city manager Carl Schwing, relied on these reserves to find that balance, but caused dissension among city council’s ranks as to whether this was the best use for the money set aside.
King then tendered the pay cut plan late last week, proposing to cut $6.2 million from Schwing’s submittal through an as-yet undetailed 6.7 percent in payroll cuts, incensing city employees, many of whom told council Tuesday night King’s proposal means a loss of jobs next year.
In answer to a question posed by Chulakes-Leetz, King told the board Tuesday night that no jobs would be lost. He did not, however, answer a second question as to what the payroll cuts would mean, citing pending labor negotiations as the reason to stay silent.
The lack of detail was cause for some sharp criticism.
McClain bluntly called King’s amended budget proposal the “biggest piece of crap” he’d ever seen, adding that the proposal’s direction was unclear with little detail as to how, exactly, the savings were to be realized.
McClain told his fellow council members Tuesday night the proposal’s bottom line likely does mean a loss of jobs, because there seems to be no other way to achieve the savings.
“I don’t see it (working) without losing jobs; there’s nothing that says how this will be done. There’s no strategic plan and no direction,” McClain said.
Kurt Grau, president of the Cape Coral Fraternal Order of Police, said the intent of the amended plan was to attack employee morale, which is already at an all time low.
Grau told council during public comment that the union would not take the pay cuts lightly, acting as if the cuts were the opening salvo of a forthcoming conflict.
“If you expect us to take a 7 percent pay cut, shove it down our throats and be happy about it, we won’t and we will fight,” Grau said. “We will not break the police union.”
Councilmember Kevin McGrail, who unsuccessfully moved to have council approve Schwing’s original budget proposal, equated King’s payroll cuts to “moving the finish line” on city employees, who have undergone wage freezes and cutbacks to ensure a balanced budget this year with some savings for next.
He added that proposed pay cuts should be done via negotiation, and through the city manager’s office, or on the dais.
McGrail said the reserves were built up so council would not be put into this position.
“I don’t understand why we need to keep it all in the reserves when it was put there specifically for this purpose,” McGrail said of next year’s budget.
City Council’s next budget hearing is Sept. 21. At that time additional public input will be accepted and council will vote on its final budget document for fiscal year 2011.
As currently tendered in both the original and amended budget proposal, the property tax rate in Cape Coral would stay the same, 7.9702 mills, or about $7.97 for every $1,000 of taxable property valuation.
The proposed budget for all funds totals $425,723,833, which includes the general, or operating, fund at $138,008,382.