The Stanislaus County Board of Supervisors started the hard work of balancing the county's 2010-2011 budget on April 6, approving a voluntary five percent pay cut for nearly all county employees.
The pay cut will save an estimated $13.8 million from all county funds, including $5.5 million in general fund savings. As many as 70 county positions will be saved by the cuts, but the county still expects to cut tens of employees in the coming budget cycle.
"There's no question that we will not have all of the resources needed to maintain the entire county workforce in the coming budget," said Jody Hayes, county deputy executive officer.
Tuesday's agreement is just part of the county's ongoing strategy to cut labor costs through a hiring freeze, reduced temporary staffing and travel, benefit cost reductions and voluntary time off. A preliminary 2010-2011 county budget proposal, detailing how the county expects to balance an expected multimillion dollar deficit, is expected in late May.
The county negotiated Tuesday's agreement with 12 county unions and unrepresented employees over the past four months. The salary reductions are wider ranging than last year's furloughs, which covered 11 departments and 34 percent of the county workforce, and will last through 2012.
In exchange for the 5 percent pay cut, employees will receive 5 percent of each workweek in vacation time. Workers will accrue four hours of vacation time per 80-hour pay period, or 13 days per year. All vacation time must be used by June 30, 2013, either during planned office closure dates - which have yet to be identified - or by request. Elected officials will not accrue leave time.
"This is not an insignificant reduction of wages, and I want to thank all of the countless employees who have chosen to support this," said District 3 Supervisor and Chairman of the Board Jeff Grover. "I think it is an unprecedented time of financial stress for this organization."
Not all county employees will receive the pay cut.
Elected department heads had to voluntarily participate in the program. Most agreed, but county Treasurer/Tax Collector Gordon Ford opted out in response to the county's denial of recommended 12.6 percent pay increases in 2007 and 2008.
Employees of the county's physician training program will also not receive the salary reduction, as they are set to negotiate a new contract with a non-profit consortium assuming responsibility for the program this summer.
County workers who notify the county they intend to retire will also not see their pay cut, so as not to effect retirement benefits.
Tuesday's agreement also offers employees financial incentives for retiring. Workers with 20 years of service, or who are otherwise eligible for retirement, can receive a $1,000 cash payout per year of service, up to $25,000, with department head and chief executive officer approval. Department heads and elected officials are not eligible for the retirement incentive plan.
Employees opting into the plan must retire between July 1 and July 31. They may not count the payout toward their retirement benefits.
The retirement incentive program will be less expensive to the county than costs associated with layoffs, according to Hayes. All positions made vacant through the program will be deleted Aug. 1, though departments do have some flexibility to eliminate other less crucial positions in some retirements.
To save money going forward, supervisors agreed to cut retirement benefits for non-union employees hired from 2011 onward, returning benefits to their pre-March 2002 levels. Rather than receiving 2 percent at age 55, 3 percent at age 50 for safety employees, the workers will receive 2 percent at age 61, or 2 percent at age 50 for safety employees.
The retirement benefit change will not affect current employees, and will not currently affect any union workers. The county will negotiate the retirement benefit change with union bargaining groups in the coming months.
The savings generated by the shift in retirement benefits has yet to be determined, but will be calculated prior to Jan. 1, 2011.
Despite the changes and cutbacks, supervisors remained cautiously optimistic about the future.
"This too will pass," said District 4 Supervisor Dick Monteith. "We have our challenges now, but remember down the road we will continue to work, and work our way out of this."
The pay cut will save an estimated $13.8 million from all county funds, including $5.5 million in general fund savings. As many as 70 county positions will be saved by the cuts, but the county still expects to cut tens of employees in the coming budget cycle.
"There's no question that we will not have all of the resources needed to maintain the entire county workforce in the coming budget," said Jody Hayes, county deputy executive officer.
Tuesday's agreement is just part of the county's ongoing strategy to cut labor costs through a hiring freeze, reduced temporary staffing and travel, benefit cost reductions and voluntary time off. A preliminary 2010-2011 county budget proposal, detailing how the county expects to balance an expected multimillion dollar deficit, is expected in late May.
The county negotiated Tuesday's agreement with 12 county unions and unrepresented employees over the past four months. The salary reductions are wider ranging than last year's furloughs, which covered 11 departments and 34 percent of the county workforce, and will last through 2012.
In exchange for the 5 percent pay cut, employees will receive 5 percent of each workweek in vacation time. Workers will accrue four hours of vacation time per 80-hour pay period, or 13 days per year. All vacation time must be used by June 30, 2013, either during planned office closure dates - which have yet to be identified - or by request. Elected officials will not accrue leave time.
"This is not an insignificant reduction of wages, and I want to thank all of the countless employees who have chosen to support this," said District 3 Supervisor and Chairman of the Board Jeff Grover. "I think it is an unprecedented time of financial stress for this organization."
Not all county employees will receive the pay cut.
Elected department heads had to voluntarily participate in the program. Most agreed, but county Treasurer/Tax Collector Gordon Ford opted out in response to the county's denial of recommended 12.6 percent pay increases in 2007 and 2008.
Employees of the county's physician training program will also not receive the salary reduction, as they are set to negotiate a new contract with a non-profit consortium assuming responsibility for the program this summer.
County workers who notify the county they intend to retire will also not see their pay cut, so as not to effect retirement benefits.
Tuesday's agreement also offers employees financial incentives for retiring. Workers with 20 years of service, or who are otherwise eligible for retirement, can receive a $1,000 cash payout per year of service, up to $25,000, with department head and chief executive officer approval. Department heads and elected officials are not eligible for the retirement incentive plan.
Employees opting into the plan must retire between July 1 and July 31. They may not count the payout toward their retirement benefits.
The retirement incentive program will be less expensive to the county than costs associated with layoffs, according to Hayes. All positions made vacant through the program will be deleted Aug. 1, though departments do have some flexibility to eliminate other less crucial positions in some retirements.
To save money going forward, supervisors agreed to cut retirement benefits for non-union employees hired from 2011 onward, returning benefits to their pre-March 2002 levels. Rather than receiving 2 percent at age 55, 3 percent at age 50 for safety employees, the workers will receive 2 percent at age 61, or 2 percent at age 50 for safety employees.
The retirement benefit change will not affect current employees, and will not currently affect any union workers. The county will negotiate the retirement benefit change with union bargaining groups in the coming months.
The savings generated by the shift in retirement benefits has yet to be determined, but will be calculated prior to Jan. 1, 2011.
Despite the changes and cutbacks, supervisors remained cautiously optimistic about the future.
"This too will pass," said District 4 Supervisor Dick Monteith. "We have our challenges now, but remember down the road we will continue to work, and work our way out of this."
