CITY HALL — Hundreds of city employees voted in favor of forgoing performance bonuses this fiscal year, an action that is expected to save City Hall $1.3 million.

City Manager Lamont Ewell approached three bargaining units earlier this year and asked them to give up $2.3 million in bonuses in an effort to prevent cuts to services and possible layoffs because of a reduction in revenue. Two bargaining units representing department heads and division managers — Executive Pay Plan (EPP) and Management Team Associates (MTA) for a total of 67 employees, had agreed to forgo bonuses in April, but the largest group, Administrative Team Associates (ATA), which represents roughly 240 employees, did not, with representatives saying they had to take the issue to their members for a vote.

A vote was held last month and the members agreed to give up the bonuses, representing roughly $1.3 million.

“This was an especially difficult decision for ATA members to make, but in the end we are doing the right thing right to close the budget gap for the current fiscal year and still provide the high level of services the residents receive from our members,” said Benjamin Steers, a software systems analyst for the Big Blue Bus and president of the ATA.

“During this tough economic time, ATA members are making a personal sacrifice by voluntarily reducing their compensation to share the burden of this fiscal crisis,” Steers added. “We hope the city remembers ATA’s sacrifice when economic conditions improve.”

Steers said the proposal to forgo bonuses had overwhelming support.

The economic downturn has contributed to a decline in revenues for City Hall, with nearly every revenue stream struggling, forcing city officials to institute a hiring freeze and find cost reductions across the board. The proposed budget for the coming fiscal year includes the use of strategic reserves set aside by the City Council to close the budget gap and protect services.

The bonuses played a role in helping city officials propose a balanced budget.

“The $2.3 million in bonuses saved in this year’s upcoming budget will greatly assist us in maintaining services at the current level that our residents enjoy and have come to expect,” Ewell said Monday. “I remain extremely proud of the senior and mid level leadership team of the city. They have consistently put the needs of our residents first. It is clearly why the city of Santa Monica is so highly regarded.” 

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.

ATA members are currently working under an old contract that expired in July of 2008, but was extended for one year.

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