The Antioch City Council voted unanimously Thursday to eliminate “Furlough Fridays” and restore city services to full-time status for the first time in 5-years.
The actions by the council will provide staff with a 3% salary increase and will end the 36-hour work week and a 10 percent salary reduction beginning January 11. Staff will return to a 40-hour work week based on “trigger” language found in a January 11, 2011 agreement for the General Fund Revenues of the city reaching $38.4 million with a reserve maintained at 10%.
The move was triggered after Fiscal Year 2014 resulted in approximately $3.1 million more in fund balance at June 30,2015 than what was anticipated in the adopted budgets.
Even with the news, some residents, including councilwoman elect Lori Ogorchock were not pleased with the idea of using city funds to return staff to a 40-hr work week. Instead, they thought the money should be used on police services.
Orgorchock spoke during public comments highlighted that the State has said that Antioch must pay them $1.8 million and asked where those funds coming from and when does it have to be paid. She also questioned the staff report ending “furlough Fridays” at a cost of $441,000.
“Those funds should be spent hiring more police, code enforcement and community service officers. City staff can be back to work using the current 36-hr week that they are on now,” stated Ogorchock. “Regardless of the promises made to staff, there is a commitment that we made to the residents of Antioch which is public safety which is the highest priority and should be the highest budget priority. Let’s get crime under control.”
She requested she the Council holds off on the vote until she was seated onto the council.
Sandra McKee stated her concern about the decision to increase employee pay and hours versus spending the money on police services.
“One of the first things I learned as an adult was budgeting and how to run a household. As a city, it’s very similar,” stated McKee. “I am against the cancelling the furloughs and the money that was mentioned to be spent… I feel at this date and time and in this place the city is in we need to be paying more attention to what is best going to happen for the city as a whole and the citizens in this city. I think building up our police department and getting a handle on crime is much more important.”
She stated that the employees could be addressed with hours and pay at a later date when the city is in more stable of a position.
Rich Buongiorno stated his concern was the City Managers Report and the information on the Redevelopment and there was a lot of open questions.
“I think it would help if the City knew we had $1.8 million we owe. Are we going to do this once every year or thirds, what are we going to do? Are we going to incur any type of penalties? Saying we have $1.8 million that we need to pay somebody is a lot of money,” said Buongiorno.
Robin Agopian urged the council to postpone a council decision on budget items until the council has all five positions filled.
“I believe that spot deserves a vote,” stated Agopian. “I would like the fairness of that spot because the community needs all five of you represented. Lori needs to have a chance and I would like for you to consider holding off voting on that. I am wondering the urgency why it needs to be done now instead of waiting until Lori can be sworn into her seat.”
Mark Jordan requested the council postpone the decision claiming the public did not have enough information about what has transpired to get to this point.
“The new council member is not a council member yet so that is not reason that you postpone. Several months ago the Finance Director presented a report where they stated they were hoping things would get better,” stated Jordan. “That was one of the comments, that is not a plan. We have now got $1.8 million bill sitting there and one of the issues not being addressed is the unfunded retirements sitting out there from $50 million to $120 million. But that issue is not even being addressed.”
He requested Items G, H and I be postponed until the next meeting so that a report can be prepared for public review.
Manuel Solis suggested Items G, H, and I be postponed from a budget standpoint stating that the City of Brentwood is pulling out of the police dispatch center contract which meant a hole in the budget. He then questioned Measure O and what its intention was.
“Measure O was presented as a measure to try and address neighborhood improvement and blighted properties. I know that couldn’t be included as part of the ballot language because of Prop 218 reasons but I think the people that were really behind it and voted for it was because that was the main reason they should be supporting it,” explained Solis. “To have the funds diverted after the fact and the vote was taken and going to an important part of the budget that was not discussed seems a bit disingenuous. I don’t think there was any malcontent on anyone’s part, but it doesn’t look good. If it doesn’t look good, don’t do it even though you are well within your right.”
Antioch City Manager Steve Duran spoke about “trigger language” and how the council had always intended to bring staff back to a 40-hr work week highlighting nothing was hidden from the public.
“The budget session highlighted that the City of Antioch was to get people off furloughs as soon as we reasonably could,” stated Duran. “So that is one of the things you are doing and in terms of Measure O, the council approved spending priorities on Sept. 23, 2014 where we were going to hire a person to collect business license tax, put the police onto the EBRCS system, third was get rid of the furloughs… and fourth for the future filling of budget holes.”
Duran highlighted that during public meetings the council stated the goal was to get people off furlough.
“In terms of keeping your word, people need to understand that was what your word,” said Duran. “Come January, we now have had employees on furlough for 5 ½ years since they took a 10% cut in their hours and pay. Management just got a cut in the pay, not the hours.”
Duran stated that if everyone had read Item 3 of the Agenda, that shows where the money is coming from which states for Police and Code Enforcement, there is an extra $398,689 that came in above budget projections from carry over in 2013/14—this is available for more police. The cops grant also allows us to up the number of police officers.
“The biggest part of the money to take of the triggers was the $1.277 million in property tax revenue above our projections for this year. So that would take care of the expenses of getting back off the furloughs. So that is why this is coming forward,” explained Duran. “The trigger excluded any Measure C funds, but that property tax getting so high that hit the trigger. With the trigger, the bargaining unit was entitled to get off furloughs.”
He also noted other trigger language for Local 1 and trying to finalize the agreement with Operating Engineers 3.
“We can’t not do the trigger because that is a binding contract,” explained Duran. “But secondly, the money is there and the reason the trigger is hit is because the money is there and I will leave it at that.”
Michelle Fitzer added that once the bargaining unit moved forward, the City of Antioch has 30-days to respond. She noted that if the council chooses to take no action within the 30-days, which she said they do not have the time, it puts the city in jeopardy of liability of unfair work practices.
Tiscareno highlighted that residents of Antioch want staff and city services full-time.
“It’s been mentioned that we made a promise to staff, but the last 3-4 months I’ve talked to citizens and knocking on doors and yes they are frustrated with crime and for the most part in their neighborhoods they are very happy where they live and felt safe in their area, but one thing they mentioned our streets need to be repaired, we need to make sure we have availability within our services so we can be services. I heard that quite a bit,” explained Tiscareno. “One of the things I promised our staff and our community that we were going to be a full service city. It’s important that we are a full service city and it helps prevent crime. We keep our city clean, improve our roads, you keep the community happy.”
He highlighted that the city needs to act now and get the work done because they were elected to get the job done.
Mary Rocha highlighted that the question was is this money we have now or is it coming. She highlighted this is money they have now.
“Under the circumstances of the 30-days, it’s important we act now. The second thing is you have to remember that we asked these employees to take time off of their contract, work only 4-days and saw what the city looked like. We saw the lines at City Hall for the water bill,” said Rocha. “They gave up a lot, twice we were going into bankruptcy, we didn’t do that. Money would have then been spent in the courtroom. Employees saved us, they worked and understood that they had to take back and wait.”
She said she was comfortable with the decision because the money is there.
Fitzer highlighted that the trigger language was originally hit in July with the million dollar in added property tax revenue in July—the first level of the trigger.
Mayor Harper highlighted how staff saved the city.
“I think people need to realize the employees saved us from bankruptcy,” said Harper. “Where they gave up a total of $3 million. They have been working a short-week for 5 ½ years they have given up. Now when we get the money at a higher rate and have it, do we say yes we have it but we are not giving it to you. I’ve heard that before.
He highlighted how the City of Antioch does not just need to restore employees, but city services.
“I believe the employees saved us and I believe we need to do right by the employees. They did not ask for retroactive pay so they could have put that into the contract or paid for the whole year, they did not ask for any of that,” stated Harper. “They just want to be restored to a whole work week. We did not just hear about this trigger today, council has asked about this trigger over and over in closed session.”
Harper noted that just because residents will ask questions, it does not mean it’s the first time the council has heard about triggers or an item noting that negotiations had been on going.
“Whether you believe it or not, having code enforcement full time improves safety, fixing pot holes, being there for police dept. when they need something boarded up or a street blocked off,” said Haper. “We are going to be a safe city and a full service city… the trigger already happened months ago. Do we as a council have integrity and do the right thing. I say yes.”
Mark Jordan encouraged staff to better prepare and disburse information to the community.
“While you have been informed of the information regarding the trigger and reinstatement of the employees and that should occur. From the perspective of the public, this is being dropped very quickly,” said Jordan. “What we hear is that we are moving to deficit spending, we hear an additional tax is necessary… and while I applaud you for putting the employees back to work, the communication we are receiving at our end relative to the trigger, why its occurring, contractual obligation, I do not believe was communicated to us and I would like to see better communication.
Manuel Solis – I believe this is a pure budgetary issue and I disagree with the city manager and believe you should hold off because it sends the wrong message to the public. Measure O supporters, it has the appearance this is where the funds are coming from.
“I don’t think the city workforce and contract should wag the tail of 100,000 citizens and I think it should be the other way around,” said Solis. “Good luck with your vote, I believe you should hold off.”
Ken Turnage highlighted he supports a 40-hr work week, but accused the council of knowing this was going to happen about this time and questioned why the council never said anything to the public.
“Why wasn’t it said before the election? Were you afraid Measure O would not pass if you told people we were going back on the furlough because we have the money from the property taxes? You had to have known well before the election?” said Turnage. “As a citizen, the perception of what just transpired is like a blanket being pulled over your head, it’s not very nice.”
He stated the council should have been more upfront about what they were going with the furloughs and the plan and well in advance.
“Perception is reality,” stated Turnage. “The perception is we were deceived!”
Harper requested the City Manager to repeat what he said about the meeting where the Council set priorities and reminded Mr. Turnage about a flyer they handed out.
Duran highlighted spending priorities were discussed on Sept. 23 should Measure O pass. Duran stated the council made it clear what the priorities were going to be.
“What some of the people who spoke earlier missed was this is a contractual obligation for the triggers to go away,” stated Duran. ”That is an existing forcible contract because of what of Ms. Fitzer stated in terms of Labor Law which are in effect until changed or they go away.”
Harper requested Duran get rid of all triggers in the future in terms of contracts and they not be used to tie the hands of future councils.
Tiscareno addressed Mr. Turnages question by stating he came onto the council two years ago bringing back employees and becoming a full service city. He further noted the budget talks and spending. Measure O spending was discussed well in advance.
Rocha added that the money they are talking about using for bringing back staff is not even Measure O money because they do not have that money yet. Instead, it’s the 17% increase from property taxes.
“That was a surprised,” said Rocha. “You will hear there is other money that also came in. It’s not right to penalize employees.”
Harper stated they had trigger language requiring them to do certain things with a budget.
“No more trigger language going forward,” proclaimed Harper. “Now we have to do right by the employees and operate in good faith and I believe this is in good faith and lets open city hall and police lobby and open the city up for full service.”
- Item G – passed 4-0
- Item H – passed 4-0
- Item I – passed 4-0
Antioch City Budget Tidbits:
- 17.81% increase in property assessed values by the County Assessor. A 5% increase was budgeted. This results in $1,276,916 more projected property tax revenue than budgeted.
- $399,850 increase in other revenues for payments due under the Out of Agency Services and Project Agreement with NRG. These funds were budgeted to be received in fiscal year 2013-14 based on the annexation date, however, the reimbursement was not requested until September due to the time involved working with NRG to confirm all amounts to be paid.
- Increase in revenues from other agencies of $121,060 for State Mandated Cost Reimbursements which were filed prior to 2004 that the State of California had previously suspended payment for that are now being released.
- Increase in transfers in of $25,170 from the LLEBG/Byrne Grant Special Revenue Fund representing the balance remaining of the Byrne Grant at June 30, 2014. Monies are used to help fund staff time for the Police volunteer program. A budget amendment for the LLEBG/Byrne Grant Fund is included in Attachment B.
- Increase in Community Development expenditures of $60,000 for replacement of the building permit system. Community Development collects a technology fee (2% of building permit fee) with each permit. This fee was established to keep up with technology related to issuance of permits, plan review, and public access. Approximately $75,000 has been collected since inception of the fee and $60,000 is needed to upgrade the building permit software. The current software is no longer supported. In addition, electronic plan submittal, permit issuance, internet inspection requests, and payment will be added capabilities. This will expedite many of the functions performed by Community Development and will increase public transparency and ability to easily access permit information on-line. The permit system is also used by the Planning and Code Enforcement Divisions and Public Works for encroachment and other permit tracking so efficiency improvements will not be limited to the Building Division. In addition, on-line payment capabilities will alleviate the cashier/water desk lines, to the extent that they are impacted by Community Development customers. Many contractors have complained about standing in the water payment line. This upgrade will accomplish Strategic Plan Strategy G-4, Streamline Entitlement and Permit Processes.
- Increase in personnel expenditures of $220,820 in the General Fund and $95,111 across other funds of the City (see Attachment C for detail of other funds) related to elimination of furloughs and reinstatement of deferred compensation for the Management and Confidential Bargaining Units effective in January 2015. This assumes the items on the consent calendar for this evening for the Management and Confidential benefit documents are approved.
- $538,628 in Police Department personnel expenditures and $124,655 in grant reimbursement for five additional Police Officers to be added to the budget under the 2014 COPS Hiring Grant. As City Council is aware, the Police Department just received a $625,000 grant award under the 2014 COPS Hiring Program to hire five additional Police Officers. The grant is for a three year period and requires a cash match of $1,937,316 (24.39% federal, 75.61% local of officer cost under grant). Measure C will be the source of match. This will bring the total funded Officers from 97 as in the adopted budget to 102. The amount of the amendments represents pro-rated projected costs and reimbursements through the end of the fiscal year. A revised Measure C table is presented on the next page (note that the revised budget includes other budget amendments for encumbrances outstanding outlined in Attachment A and other amendments as outlined in Attachment C) :
Another item affecting the budget but not being accounted for at this time relates to negotiated salary increases for the Police Department. The APOA and APSMA bargaining units were entitled to salary increases in September 2014 at a minimum of 2% and a maximum of 4.25% based upon the existing four-city formula (and CPI for non-sworn members). The budget assumed a 3% raise, however, for APOA the salary increase was 4.25% for sworn, 3% for nonsworn and for APSMA the salary increase was 2%. The cost differential in the projection is $142,830; however, we believe vacancy savings will be sufficient to cover the increase in the projections over the adopted budget.
The following are the most significant factors contributing to the variances from budget:
- Approximately $400,000 more in Measure C sales tax revenue than projected. The amount of Measure C funds received for the April through June collection period ($898,689) have been committed in the ending fund balance for Police Services for use in future budget years. An additional $50,902 was received and allocated to the Vehicle Replacement Fund for the purchase of two Police Vehicles as approved by the City Council in the adopted budget.
- Approximately $216,000 more in Property Tax received in the final June payment from the County.
- Approximately $109,000 more in plan checking and inspection fees than projected.
- Approximately $80,000 savings in Nondepartmental expenditures resulting from paying less in claims liabilities than projected for.
- Approximately $139,000 in savings in Legislative & Administrative due mainly to contractual savings. Of this amount $32,528 is for an encumbrance being re-appropriated into the current year (see Attachment A).
- Approximately $756,000 savings in Public Works expenditures. $122,907 is for projects and encumbrances being re-appropriated into the current fiscal year as projects were not completed by year end (see Attachments A & B). $37,000 in savings was realized in subsidy transfers to street light and landscape districts. The majority of remaining savings resulted from spending less in contractual services for street, signal and parks maintenance than projected.
- Approximately $574,000 savings in Police Department expenditures. Of this amount, $51,295 is for encumbrances being re-appropriated into the current fiscal year as projects were not completed by year end (see Attachment A). $496,500 is attributable to salary savings due to unexpected vacancies and despite ongoing recruitment, with the remainder of savings coming from various expenditure line items throughout the department.
- The remainder of General Fund savings ($87,000) is due to various accounts coming in slightly under budget.
The net impact of the fiscal year 2014 surplus and budget amendments to this fiscal year results in approximately $3.1M more in fund balance at June 30, 2015 than anticipated in the adopted budget. While this is positive news, we cannot let it overshadow the fact that $988,008 of this is committed Measure C funds at June 30, 2015 to be spent on Police services in the next fiscal year and we are projecting deficit spending in outlying fiscal years (updated projections will be provided when we begin the next budget cycle).
It is imperative that the City strive to continue to balance the budget each fiscal year and build reserves so that the City cannot only begin to restore all services to pre-recession levels, but begin to pay down significant unfunded pension related liabilities and put the City in better financial footing should we again face a severe recession so that the impact is not as devastating.
Even with the tremendous property tax increase the City experienced, revenues are still short approximately $2M from pre-recession levels. We also cannot forget that revenue numbers include Measure C projections that will expire in seven years. If the measure is not extended, the
General Fund will lose approximately $5M in revenue annually which could cause cuts to the Police Department if other revenue sources or reserves are not sufficient to cover Police Department expenditures that had previously been funded with Measure C.