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Sacramento County’s Struggle to Close $123.7 Million Budget Gap Leaves Workforce Mostly Untouched

June 21, 2008

By Ed Fletcher, The Sacramento Bee, Calif.

Jun. 21–As Sacramento County supervisors labored to solve a projected shortfall of $123.7 million this week, they left the county’s biggest expense — labor — largely untouched.

Payroll accounts for 45 percent of the county’s $2.2 billion in general fund spending. And while general fund spending is expected to dip slightly from the current budget year to the next, the county’s payroll will increase by 7 percent, or $74.5 million.

The budget approved Wednesday on a 5-0 vote cuts nearly $68 million in county spending and utilizes $55 million in reserves. County social service safety-net programs were hardest hit.

Supervisor Roberta MacGlashan said suggestions that the budget doesn’t include personnel cuts are unfounded.

“The budget does include payroll cuts — approximately 300 positions (will be eliminated), 75 of which are filled,” MacGlashan said.

Bob Blymyer, executive director of the Sacramento County Taxpayers League, said wages shouldn’t increase faster than the cost of living.

“With things slowing down all over, it’s hard to believe payroll keeps increasing,” Blymyer said.

Ken Mayes, a retired Chevron manager who also worked as an adviser to the city of Richmond, said the county should have done more to trim payroll costs.

“They didn’t go after (payroll) at all, as far as I can tell,” Mayes said. “Everybody who works for the county still works for the county — and got a raise.”

Mayes is mostly right.

Unlike most workers in private-sector jobs, the bulk of the county’s 14,256 employees work under contracts negotiated by unions.

Five-year contracts inked in 2006 give some employees significant salary boosts spread over the length of the contract in addition to cost-of-living increases given to all workers. The extra pay given to some classes of employees was based on comparisons made with public-sector counterparts.

Under the terms of the agreements, reached after a brief employee strike, the county’s total cost of paying salaries and benefits will increase 7 percent in the budget year starting July 1. Payroll is projected to increase another 6 percent in the 2009-10 budget year and 7 percent in the final year of the contracts.

In this budget crisis, the county didn’t try to force employee unions to accept cuts to salaries or benefits — a step that wouldn’t necessarily have produced results.

“We wanted to keep our commitment to the represented employees,” county spokesman Zeke Holst told The Bee.

He said the county budget does include cuts to payrolls and social service cuts.

“We eliminated funded vacancies throughout the county. In effect, that’s a personnel cut although not a layoff,” Holst said.

The budget calls for eliminating 300 of the 10,751 authorized positions, a 2.8 percent reduction. Since most of those positions are vacant, some 75 workers are expected to be transferred to different county jobs, and only a handful are facing layoffs.

Meanwhile, in March the city of Sacramento — faced with a $59 million shortfall — announced that it was trying to buy out 200 employees.

While the county didn’t make an aggressive push to alter current employee benefits, MacGlashan did take a stab at reducing benefit costs by eliminating a health-care subsidy for retired employees.

The program gives retirees up to $244 a month for medical expenses and $25 a month for dental care.

After years of debate about the program, which is subject to an annual vote, the board voted last May to limit the benefit to current retirees, discontinuing the subsidies to employees retiring after May 31, 2007.

MacGlashan pushed to end funding for the program, freeing up $2.5 million that could used to save other programs.

The proposal, offered on the final day of budget deliberations, fell on a 3-2 vote, with Supervisor Susan Peters supporting the motion.

Mike DeBord, the county’s human resources administrator when he retired in 2003, argued against cutting the benefit and said there are still unfilled but funded positions that should be swiped from departments’ books.

In recent years, as many as 1,400 job openings appeared on the books as a cost but generated savings when they weren’t filled. The most recent figure was not immediately available.

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Copyright (c) 2008, The Sacramento Bee, Calif.

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