2011 Budget Address

UAGE was instrumental in paving the way to the employee compensation for the 2011 budget.  The Mayor proposed this budget to the council today at 10:00 AM.  Read the contents below.

For a more detailed look, click here for the entire budget proposal.

Budget Address
Council Chambers
Tuesday, October 26, 2010
10:00 a.m.
Mr. Chairman, Council Members, Salt Lake County Elected Officials, employees, volunteers and friends. I am pleased to be with you today.

When I came into office, I pledged to make decisions that are best for the citizens of this county.

Over the last few years, that has meant making a lot of tough choices. And those choices have paid off: today our county is functioning efficiently and effectively.

The budget we propose today is balanced. Our on-going expenditures are in line with our on-going revenue, and our fund balances are strong. We will not increase taxes or fees.

In addition, with the strategies we outline today, our budget will continue to be balanced, not only this year, but next year as well.

Not only are our individual funds structurally balanced, but our overall appropriations, not including pass-through funds for UDOT, will decrease again in 2011.

It’s not magic; it’s been more than two years in the making.

We’ve experienced:

  • Two years of decreased spending,
  • Two rounds of early retirement programs,
  • Two hiring freezes,
  • Downsizing the county workforce, and
  • A reduction in salaries and benefits across the board.

Together, those strategies put us in the better position we are in today. And we did not cut services in any significant way.

We refused to cower in the shadows of the recession. The future doesn’t wait; so we chose to be prepared for it, even though that meant making tough decisions.

The economy in Salt Lake County appears to be improving, and we anticipate some modest revenue growth in 2011. We are hopeful, but we’re maintaining a conservative approach.

The 2011 budget helps us move forward in a number of ways:

First, we’re making public safety a priority in the Municipal Services Fund:

  • $645,000 for new sidewalks;
  • $227,000 for new public works equipment; and
  • $500,000 to further lower the UPD fee. This reduction is in addition to the $500,000 reduction made in June, resulting in a total fee reduction of $1 million, or 7.8 percent.
  • It’s a small step, but another step in the right direction. And it keeps the promise to lower the UPD fee as funding becomes available.

Second, we’re proposing a plan to bring employee pay back to its 2008 level. Our employees have been asked to sacrifice during these lean years, and as revenue comes back, we are restoring employee compensation.

If the projections stay positive, within a 12 month period we will fully restore the salary and benefit hit employees experienced this year.

It’s important to restore this cut for several reasons: first, and most importantly, we made a commitment to do so when the cut was made.

Second, employees are our greatest asset in the county, and they have been giving their best – finding ways to be more productive, even with new services to provide and fewer employees to provide them.

Let me share one example of that:
The lighting at the Taylorsville Recreation Center above the climbing wall needed to be serviced. This lighting is 75 feet in the air, and the estimates to hire a team to do the work were extremely high. So Martin Jensen of Parks and Recreation took his climbing experience from college, roped up and did the work, with the assistance of two college climbing friends, for less than $100 dollars in parts. The lights are back on and the County was able to save taxpayers money because of Martin’s willingness to literally “go out on a limb.”

We want to keep our employees motivated to do great work like this for the county. Our approach is a prudent one: we will look to the future and move the county forward by using our resources wisely.

But this proposal does not just maintain the status quo.

We are working harder and working better, which has enabled us to provide expanded services to a growing county population.

There’s no other way to explain how Salt Lake County is absorbing the costs associated with half a dozen new facilities in this budget: new recreation centers, new branch libraries and new senior centers.

We knew they were coming on line, and we planned for them.
The budget strategies we’ve used since mid-2008 were designed to absorb the costs of these facilities, plus their operation and staffing needs.

While balancing our budgets, we will increase and continue support for:

  • Blueprint Jordan River,
  • Sustainability and growing a green economy,
  • Community gardens and urban farming,
  • Protecting information technology at the Emergency Operations Center,
  • And improving alternatives to incarceration

Darrin Casper, our chief financial officer, and his team along with Doug Willmore, our department heads, division directors, program managers and fiscal officers are to be congratulated for their work in preparing the budget plan we submit today.

This has been a 2 ½ year project to get us where we are:

  • A structurally balanced budget for 2011 and 2012,
  • An Employee Compensation Restoration Plan,
  • Increased services and facilities for our growing population,
  • Strong fund balances and
  • Our coveted triple-A bond ratings

It hasn’t been easy; it is the result of a lot of hard work by a lot of dedicated people.

And the result is a measured, prudent budget that meets the needs of our growing population.

In closing, I want to express my appreciation for our employees, who are able to serve our county so effectively and efficiently. To each of you, congratulations on a job well done, and thank you.

I also appreciate the efforts made by the Council and Council staff, and our independent elected officials. We could not have done this without your support.

Together, we will continue the vigilant protection of families and their pocketbooks.

Now, I’d like to turn the time over to Darrin Casper to offer the specifics in our 2011 budget proposal.

Corroon calls for boost in Salt Lake County pay

By Jeremiah Stettler

The Salt Lake Tribune
Published Oct 19, 2010 06:35PM
Updated Oct 20, 2010 12:54AM

With signs the economy is picking up, Salt Lake County is considering better pay and benefits for its 3,500-plus employees.

Mayor Peter Corroon is proposing an uptick in salaries and retirement benefits that could restore, on an incremental basis, some of the pay and 401(k) perks that employees lost because of the Great Recession.

In a recommendation Tuesday to the County Council, he called for a 1 percent salary raise in January, followed by increases of 1 percent (in July) and 0.75 percent (in January 2012) if the county’s tax receipts come in as expected.

The Democratic mayor, who is running for governor, also suggested adding a 1 percent 401(k) match in January, followed by two additional jumps of 1 percent in July 2011 and January 2012 if the county meets its financial goals.

“It is not about a pay increase,” explained Doug Willmore, the mayor’s chief administrative officer. “It is about restoring cuts that were made.”

The proposed boost in pay and benefits comes a year after the county cut salaries 2.75 percent. A year before that, it suspended its contribution to employees’ 401(k) accounts.

The council put off its decision on employee pay until next week. But the council’s Democratic majority appears to favor the proposal.

“Doing anything less than this would be overly stingy,” Council Chairman Joe Hatch said. “Doing anything more than this would put the taxpayers and the budget at risk.”

And employee groups seem satisfied as well. Three organizations representing county employees expressed support for Corroon’s proposal.

“If you can make this happen, it will be an incredible boon to Salt lake County,” said Jan Johnson, who represents the Utah Alliance of Government Employees, adding that her organization “very, very strongly” backs the plan.

The council is expected to take action next week, when Corroon is poised to unveil his 2011 budget.

Public Employees Under Attack

The people who teach our children, protect us from crime, put out fires in our homes and make sure our water is clean are under attack. Conservative pundits and politicians across the country are using the economic crisis to attack public employees and portray them as privileged compared with everyone else. They use the fact that public employees, many of whom are union members, have been able to keep their well-funded pensions, reasonable hours and decent pay to stir up rage from those who have lost these benefits in the private sector.

Many cash-starved state and local governments have used these same arguments as a cover to cut services, personnel and pension benefits to balance their budgets and weaken unions.

Several new studies should put those arguments to rest. The Economic Policy Institute (EPI) found that state and local public employees are actually underpaid. In “Debunking the Myth of the Overcompensated Public Employee: The Evidence,” Rutgers University professor Jeffrey Keefe found that, on average, state and local government workers are paid 3.75 percent less than similar workers in the private sector.

The study also found the benefits that state and local government workers receive do not offset the lower wages they are paid. The differential is greatest for doctors, lawyers and professional employees, the study found. Read Keefe’s report here.

Public employees also work hard for their lower pay, often putting themselves in danger. According to the Center for Economic and Policy Research (CEPR), nearly two in five state and local government workers—more than 1.4 million— worked in either physically strenuous jobs or jobs with difficult working conditions. Notably, almost half (47.5 percent) of local government employees between ages 55 and 65 held such jobs. If the retirement age were increased, the report says, many of these workers, due to the physical challenges of their jobs, would have to leave the workforce before they are eligible for full retirement benefits. Read the CEPR report here.

Writing in the New York Daily News, Dan Morris of the nonpartisan Drum Major Institute for Public Policy says the attacks on public employees are absurd and dangerous.

…if public-sector workers become cheap, expendable labor, they will contribute less to the tax base and spend less, blunting private-sector job creation. A healthy public sector is just as good for the investment banker as it is for the unionized electrician.

EPI estimates that every 100 public-sector layoffs result in about 30 private-sector layoffs because the subsequent loss of income dampens consumer spending and thus weakens the economy. Says Morris:

The race to the bottom is a callous attempt to lower expectations for employment at a time when millions of people are counting on them to be raised. No victory worthy of the name can be achieved on those terms.

reprinted from AFL-CIO

The Mayor Puts Employees First

UAGE presented several requests today before the Salt Lake County Council regarding 2011 Compensation and Benefits.  The requests were made knowing that the following items would not be funded this year

  1. Merit Increase
  2. 1% Longevity Increase and
  3. early retirement incentives.

UAGE Requests:

Restore Lost Pay and Benefits by Developing a Repayment Plan:

Employees lost 2.75% merit compensation in January, 2010 after having already lost 3% contributions into their 401(k) accounts in 2008.  Our proposal was to repay 5.75% over a two year period of time by using slowly rising revenues over time to accomplish the goal.

Medical/Dental Insurance Recommendations

Aware a percentage placeholder is necessary during this budget process even though the medical year doesn’t begin until April 1, UAGE recommended PEHP keep a Grand-Father Status given them with the passage of the National Health Care Reform Act.  What that means is prices stay low with restrictions on what can be passed on to employees.  UAGE will be providing you with much more information on this topic as we approach April.

Merit/Performance Evaluation Process

UAGE recommends strong support for the restructuring of the current Performance Evaluation process used by management to obtain the best possible performance from county employees.  Knowing that the old system is broken, and with much needed training and/or retraining for managers to conduct proper evaluations (and four times a year instead of one), we feel employees will have a better and fairer chance to thoroughly understand how best to meet their overall performance goals.  This includes an opportunity for employees to evaluate their manager.  There has been talk that the percentage value placed on merit increases may change.  UAGE strongly recommends an advisory committee be established to forward recommendations for change that include all employee organizations.

Retaliation Policy

UAGE requested swift adoption of a new Retaliation Policy that will greatly change the scope to which managers can retaliate against their employee(s) without fearing their own disciplinary action.  Retaliation is currently responsible for 75% of all grievances we are currently handling for our members.  We are offering to help educate both management and employees on responsibilities each has to the other regarding this area.

Following meetings between UAGE, the Mayor and his staff, the following recommendations are being made as part of the Mayor’s proposal for employee compensation:

It is requested the Council approve the following to restore this 5.75% reduction:

1.       Base Pay Adjustment:

  • A 1% adjustment is recommended effective January 1, 2011
  • If  the revenue receipts meet or exceed those projected by the Auditor, the following are recommended to be awarded:
    • 1% on July 1, 2011
    • 0.75% on January 1, 2012

2.       County Contribution to Employee’s 401(k)

  • Effective January 1, 2011 award 1% to employees on the non-contributory system; employees on the contributory system to awarded 0.32%
  • If  the revenue receipts meet or exceed those projected by the Auditor, the following are recommended to be awarded:
    • 1% on July 1, 2011 for non-contributory; contributory receive 0.32%
    • 1% on January 1, 2012 for non-contributory; contributory receive 0.31%

The following are also requested for 2011:

  1. Market Adjustments (Salary Survey) Implementation
  2. 20% Discount Card
  3. Employee Benefits: Premiums and changes to the health insurance plan to be effective April 1, 2010:
  • Health Insurance: A 10% increase  in premiums is recommended as a placeholder (13% across the entire plan year of April 1, 2011 through March 30, 2012);
  • Dental Insurance: No increase in premiums is recommended
  • Benny Card: Request $37,000 (per member per month charge is $2.75)

The following are not recommended for 2011:

  1. Merit Increase
  2. 1% Longevity Increase – since merit increases are not recommended, it does not make sense to grant the longevity increase
  3. Early retirement incentives

Other Considerations:

  1. Furlough Options
    Does the Council authorize the continued use of the Voluntary Furlough Program for 2011?

Today’s meeting ended without a Council vote – they reserved that vote for next Tuesday, October 26th.  We would encourage you to contact your Council person and ask them to support this proposal.  The advantage is more money in your pocket!  If revenues behave as predicted, this time next year, UAGE may be in a position to recommend a COLA and Merit Increase on top of the 5.75% Restoration Plan.

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