CITY HALL — City Manager Lamont Ewell has asked hundreds of employees to forego performance bonuses this fiscal year so that he can prevent cuts to services and possible layoffs because of a reduction in revenue.
The move would save $2.6 million, according to city officials. The City Council approved a budget of $567 million in June of last year. Bonuses are not paid until September, which will count against the 2009-10 budget, which has yet to be approved.
Ewell said the city is facing a potential budget deficit of $8 million (best case scenario) to $16 million (worst case) based on projections given in February that reflected a significant drop in tax revenue. City departments were asked to reduce their respective budgets by 3 percent in the current fiscal year to make up for the deficit while planning for a 5 percent decrease in 2009-10.
“Our priority is to maintain service levels and minimize impacts to our residents,” Ewell said. “This one-time revenue will help balance the first year of what could be multiple year deficits resulting from the unprecedented economic downturn.”
Two bargaining units representing department heads and division managers — Executive Pay Plan (EPP) and Management Team Associates (MTA) — representing 67 employees have already agreed to forego bonuses, but the largest group, the Administrative Team Associates (ATA), which represents roughly 240 employees, has yet to vote on the issue.
Representatives from the ATA met with Ewell Wednesday and voted in favor of presenting the proposal to members, who must approve any change in their labor agreement. Bonuses are a part of the agreement. A vote is expected next month.
The ATA in 2002 voted to give up overtime to become salaried employees eligible for bonuses. Bonuses have never been a guaranteed benefit, meaning employees have to go above and beyond their regular duties to be eligible. Bonuses are a percentage of an employee’s salary, with the largest being 10 percent.
Benjamin Steers, a software systems analyst for the Big Blue Bus and president of the ATA, said members can chose to give up the bonuses in exchange for days off for those who would have earned something extra.
“ATA members want to be able to assist the city in closing their budget gap,” Steers said. “There are a wide range of opinions amongst our members. Obviously a bonus is something that is not awarded equally to all members, so for those members that do not receive bonuses the impact is less than those members who get a bonus.
“It is essentially hurting the top performers most.”
ATA representatives asked Ewell if payment of bonuses could be delayed, but there was no room for negotiation.
“I would hope that ATA members would support the proposal from the city and I think ATA members want to do what is best for the city in being able to assist in closing the budget gap,” Steers said. “We also hope that the city remembers us when economic times are good and there will be the possibility of a higher upswing … in our contracts.”
ATA members are currently working under an old contract that expired in July of 2008, but was extended for one year.
Representatives from the other two bargaining units said members voted unanimously in favor of the city manager’s proposal.
Greg Mullen, Santa Monica’s head librarian and the EPP representative, said the decision was easy for his colleagues given that they are department heads and have a responsibility to be fiscally prudent, especially when it comes to cuts in resources and staffing.
“We offered to forgo bonuses,” Mullen said. “Hopefully that will save some jobs, and in my case, hopefully have more materials, less cuts, less belt tightening … to save programs … and generally maintain resources for the community.”