TITLE
Recommendation to adopt resolution authorizing implementation of an employee work furlough in order to generate an amount equivalent to 1.92 percent in pay (40 hours for regular, full-time employees) for all permanent City employees in Fiscal Year (FY) 2009, and include associated appropriation reductions in the second quarter budget adjustments to reflect the anticipated furlough or equivalent savings. (Citywide)
DISCUSSION
The City of Long Beach, along with much of our Country, is facing serious financial challenges.
The City is currently projecting up to a $19.2 million General Fund deficit in the current fiscal year.
In addition, other funds are facing serious challenges as a result of declining revenues. Revenue shortfalls for critical revenue streams such as Oil; Sales Tax; Vehicle License Fees, and Transient Occupancy Tax, among others, are well below expected levels, creating a critical budget shortfall. The City must generate the required savings by the end of the fiscal year in order to balance the City budget. To help address this deficit, City management was directed to enter into discussions with the City's nine labor organizations regarding employee-generated cost saving options, including a potential mandatory work furlough.
City management representatives have had a number of meet and confer sessions with the City's labor organizations. While various cost saving strategies were discussed, with five months remaining in the Fiscal Year immediate action is necessary to help address the FY 2009 budget shortfall by the end of this fiscal year. Implementation of a mandatory unpaid work furlough equivalent to 1.92 percent of salaries (40 hours for regular, full-time employees) for permanent employees will provide for the continuation of critical programs and services for the public while minimizing service level impacts and mitigating the need for significant workforce reductions at this time. While City staff will try to manage the furloughs in an effort to minimize impact on the public, some City operations may experience service reductions including potential business closures. To mitigate the impact of the work furlough to employees the City has determined that benefits, leave accruals, seniority, and retirement service credit will not be affected by the furlough. There may be a minimal impact to retirement if an employee retires within twelve months of the furlough period. City management representatives will continue to meet with union representatives to identify alternative employee generated cost reduction strategies to meet budget shortfalls. A furlough may not be implemented if equivalent employee generated savings are negotiated with a labor organization.
This matter was reviewed by Deputy City Attorney Christina L. Checel, April 22, 2009, and Budget and Performance Management Bureau Manager David Wodynski on April 21,2009.
TIMING CONSIDERATIONS
City Council action is requested on May 5, 2009 to ensure timely implementation of the mandatory work furlough.
FISCAL IMPACT
The associated cost savings of the mandatory employee work furlough or alternative savings is estimated to be approximately $4 million in the General Fund, $7.2 million Citywide, within the current fiscal year. The second quarter budget adjustment will include appropriation reductions equivalent to anticipated budget savings.
SUGGESTED ACTION
Approve recommendation.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH AUTHORIZING THE IMPLEMENTATION OF EMPLOYEE WORK FURLOUGHS OR ALTERNATIVE EMPLOYEE GENERATED SAVINGS AND CITY BUSINESS CLOSURES
Respectfully Submitted,
Suzanne R. Mason
Director of Human Resources
NAME |
APPROVED: |
TITLE |
|
|
|
|
PATRICK H. WEST |
|
CITY MANAGER |