Officials at City Hall face tough choices as they seek to resolve a growing budget deficit. Glenn Moore/Tracy Press
Tracy’s budget deficit is expected to grow to $9 million for the fiscal year that ends June 30. While the city has started to pare down its workforce with layoffs, those proposed cuts are expected to save the city only about $6.5 million.
The City Council, administrators and other city workers hope the economy turns around and sagging tax income rises so further cuts are unnecessary.
But city officials are already eyeing decreases in wages and benefits for city workers, which make up the vast majority of costs to the city’s roughly $45 million general fund.
In fact, with dwindling revenues, there might not be enough money in city sales tax and property tax coffers to pay for workers just in the police and fire departments.
That could force the city to dip further into its reserves, and the council has already given the go-ahead to ask voters for a special property tax to pay for public safety.
The cost for the police and fire departments are estimated this fiscal year at $23 million and $16 million respectively, a combined 14 percent increase from the previous year.
Meanwhile, property tax and sales tax income for Tracy are falling well below the city’s summer projections of $27 million and $13 million.
Tracy has been using reserves to close its budget gap and still has about $25 million the bank, though it wants to maintain about $15 million in reserves, officials have said.
While the police officer and firefighter unions are talking to city administrators to save money and perhaps jobs, it remains to be seen whether those talks can prevent future cuts to employee incomes and benefit packages.
Fire Chief Chris Bosch said this week that his department will try to reduce overtime, which helped push the annual income of 75 percent of firefighters to more than $100,000 in the most recent fiscal year — a 25 percent jump from the previous year. Overtime cost Tracy $2.9 million overall last year, which went overwhelmingly to firefighters and police officers.
Already, there’s talk about police officers foregoing a 5 percent July pay increase called for by their union contract, and Tracy Finance Director Zane Johnston has said the city might look at 5 percent pay cuts for city workers at some point in the future.
Eight days when city workers stayed home without pay this fiscal year will save the city money by eliminating planned cost-of-living increases for Tracy employees, but except for department heads, who took actual pay cuts, no workers have seen their paychecks reduced.
That could change.
Johnston called the amount of money the city puts into police and firefighter retirement plans “unsustainable financially.”
For each dollar Tracy pays an officer or a firefighter, it puts 33 cents into the California Public Employees Retirement System. When health care expenses are included, it costs Tracy 50 cents in benefits for each dollar that’s paid to an officer or firefighter in salaries and wages.
Johnston said he expects the city’s CalPERS contribution to rise to 35 cents by 2011, when retirement rates are recalculated.
Police officers are able to retire at age 50, with 3 percent of their salaries added to their retirement payout for each year they’ve been employed, not including overtime pay, for a maximum retirement income of 90 percent of their salaries.
For firefighters, the formula is 3 percent at age 55.
The city can afford neither formula over the long term, the finance director said, and workers will likely be asked to contribute to their own retirement plans so the city can balance its budget.
Time will tell whether city officials will cut back on other benefits.
Tracy spends about $1,200 per month per employee for health insurance, an annual cost of roughly $6 million.
Even most first-year city employees get 37 paid days off a year counting sick leave, while the minimum for department heads is 53 paid days off a year. The exceptions are firefighters, who are paid for 13 holidays they work that other employees get paid to take off.
The head of Tracy’s personnel department, Maria Olvera, said she didn’t know the average number of sick days taken by city workers.
Tracy employees accrue unlimited unused sick leave, which, for workers who retire with Tracy, is paid out by the city and put into an account employees can use to pay for health care during retirement.
“Tracy is a very good place to work,” City Manager Leon Churchill said several weeks ago.
Al I suggest you sign up for the WIC program because the children should not suffer or starve and BTW I wouldn't keep announcing how hungry the children are because it sounds like Child Protective Services may get a hold of this and pay a visit.
guapo is not cyber bullying you, he can see as well as the rest of us that if you were really starving you might have to sell your computer so you can bye food. A computer is not a necessity it is a luxury
I don't think your ideas are as novel as they are politically motivated. And not very good at that either. For example if my company pays for my benefits and I foot the co pay that's not online with what you assumed. Also the House just passed a bill that would PAY your healthcare if you can't afford it.
It's the unemployed who don't have health benefits. Any novel ideas to help there and I might have been inclined to believe you.
A fundamental restructuring of public obligations is in order.
City Hall has choice. Will they do the right thing?
Here is a few novel ideas. Make employees pay for their benefits. Private sector this is the norm.
That should help the drain on the general fund.
Taxing us is not the answer. Council and city hall dug their own graves. How will they dig themselves out?
"Eight days when city workers stayed home without pay this fiscal year will save the city money by eliminating planned cost-of-living increases for Tracy employees, but except for department heads, who took actual pay cuts, no workers have seen their paychecks reduced".
8 days without pay IS A PAY CUT!! Poor department heads, my heart bleeds for you. I don't think you can compare the pay cuts department heads got with the loss of pay the city workers get by staying home. That is such B.S.
Its so nice of Zane to point out how many paid days off employees get. How many does he get?As a department head it looks like 53 days to me. Does that include executive leave also? Just because any city employee has "earned" their days off does not mean they take them off. Most places that I am aware of do offer employees vacation and sick leave. Is this a crime? Is it a crime if the employee utilizes the earned time off? There is nothing that he(Zane) mentions about retirement, vacation or sick leave packages that is out of the norm for what most municipalities in the state of California offer their employees. What is he getting? Perhaps as the cities financial expert, he(Zane) should have done a better job of advising current and past council's against giving developers a free pass on their obligations when a project was introduced. Our firefighters and police officers, and other public services might be better equiped today to serve the communities needs. The community might not have had to spend public tax dollars to build facilities and buy equipment for public saftey. No, its easier for him to come afters the wages and benefits of city employees. Its their fault...Right Zane? Maybe we can outsource Zane's job and save the tax payers some money that can be better spent elsewhere.
Timing is everything, right? I'm not falling for it.
What the article failed to include: wages, benefits, working conditions etc. at the City of Tracy are roughly the SAME as any other city in the region. That is how a good city attracts and keeps good employees. There is nothing unusual about what they offer, in the public sector. How this makes the basis for a news article...like I said, timing.
You won't get any pity from me. The fact is I'm paying less in taxes. But that's just me. I'm a homeowner. And first time homeowners get $8k.
Raise our taxes so we can fund the special interest of city hall! How else can they retire if they dont play the pity party card?
As for the issue of retirement benefits being paid by the City that Zane Johnston calls “unsustainable financially”, it was the City's CHOICE to pay those benefits. The city I worked for was VERY conservative and refused to increase that benefit because of the long-term impact it could have on that City. In addition, there were years in the '90's when City's didn't have to pay retirement benefits because CalPers was flush. What happened to that money?
These times are hard on everyone -- some more than others -- but to point fingers at City workers NOW because they have more job security than other industries is wrong. And by the way, they are NOT recession proof, as evidenced by the furlough days they have been given and the positions not being filled.
ENOUGH WITH THE "BLAME GAME"! Top management can BLAME the unions. We can BLAME the City Council. And on and on and ..... but the fact remains, there's no longer enough money to conduct "business as usual", and those with the authority need to find a way to make things work without asking the citizens to pay taxes we DON'T have. We all need to look harder to find ways to cut costs to make it through this recession.
paychecks. The people in private sectors do not have any deal like the civic government employees...
Why? It is not cost effective and or sustainable.
The finance department now is facing real world facts.
Enough is enough, we the people will not continue to fund lifestyles of city hall!
Social Security is meant to be supplemental income in retirement. It is not meant to be your entire retirement income. It is unfortunate some people learn that too late.
If 75% of firefighters make $100K or greater a year due to overtime, perhaps that means the city needs more firefighters or at least there should be a comparison of costs of overtime versus more firefighters. If Tracy firefighters go to other locations to help fight fires, the City of Tracy is reimbursed by the state, county or city they are deployed to.
The City paying $1200 a month for health benefits is not unusual for a family plan. The City paying into a pension plan (37%) is not unusual for the industry.
Firefighters and police officers put their lifes on the line every day. Their schooling, training, experience and commitment to their communities make them eligible for much more than minimum wage. They are not overpaid. In case of emergency, I'm glad they're on their way.
City staff who make in excess of $100K or $150K annually are college graduates, often with masters in business, engineering, etc. and years of knowledge and expertise.
Everyone who works for the city is not perfect, but they have been chosen from many. I suppose the city could save money by hiring the second or third best candidates.