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Current negotiations between the city and the largest of its three unions could make the difference between cutting or keeping more than 20 municipal employees, said city manager Rod Swope on Thursday.
The Marine Engineers Beneficial Association, a national union with 249 members who are currently employees of the city of Juneau, has a 3 percent pay increase contractually scheduled for January. Typically, those increases are also extended to all 700 or so central city employees, Swope said.
With the average city employee making around $80,000 annually, including benefits, should union members - and therefore all city employees - forgo that increase, it would mean a savings of around $3 million over the course of the next 2 ½ years for the city.
The savings is especially relevant given the $8 million deficit forecast through 2012 that the city Finance Committee, composed of all Assembly members, heard about at a meeting on Wednesday.
The union and some of its representatives met with Swope and other city officials Thursday night to discuss the pay increase. Many union representatives also attended the Finance Committee meeting on Wednesday, said MEBA Alaska representative Ben Goldrich.
Goldrich said while he hoped for a resolution "as soon as possible," he did not expect it Thursday night.
"This is just the first meeting we've had," he said. "We're kind of digesting the information and meeting as a group tonight."
Goldrich said the decision will most likely be put to a vote among the union's 249 current city members.
The city has about 1,700 employees, according to Swope. There are about 700 direct employees that would be impacted by any layoffs and by the union's negotiations. The other 1,000 are employees of Bartlett Regional Hospital, Docks and Harbors, the Juneau International Airport and the Juneau School District.
The other two unions with city employees as members are the Public Safety Employees Association (the police union) and the International Association of Fire Fighters. Those unions' 3-year contracts expire at the end of the year. Swope said the city has told them there is no money available for salary increases.
"I do believe that the city's financial crisis is real," Goldrich said. "City finances are fairly transparent - but they didn't happen overnight, and we'll have to see what the sentiment of the bargaining unit is. I'm not able to put my finger on that. ... If we're looking at layoffs, that concerns us all."
Swope said he hopes to have negotiations complete by January.
Cuts to come
If the city did have to do layoffs, Swope said he would meet with each individual department head and make cuts on a case by case basis. He said he already plans to meet with department heads to figure out additional possible savings within departments, including which vacancies can be kept open.
"We are trying to impact staff as minimally as possible," Swope said.
Swope said Wednesday that budget cuts would most likely have to come from added cuts, reductions and revenue increases.
He said the city would not raise taxes, but might raise fines - like those for parking or burning ordinance violations - and fees for Treadwell Arena, the swimming pool and other city facilities.
He also said some city-funded programs could be cut, though it's not certain. One of those, for example, could be the Air Medevac program run by the fire department, which primarily serves cruise ship passengers and other Southeast communities.
He also said some planning efforts, like the recently approved non-motorized transportation plan, might have to be put on hold.
The Assembly is set to provide Swope with further instruction at a Finance Committee meeting on Jan. 13.
Projections have a somewhat "Ouija board" quality to them, said Juneau Finance Director Craig Duncan. They have varied over the course of the last nine months, when the city first heard of a coming shortfall.
In March, the deficit through 2012 was projected to total $11.4 million, with a negative balance of $5.3 million in 2011 and $6.1 million in 2012.
In July, the deficit through 2012 was projected at $8.8 million, with a negative balance of $4.1 million in 2011 and $4.7 million in 2012.
December's deficit projections through 2012 total $8 million, with a negative balance of $6.1 million in 2011 and $5.3 million in 2012. Factored in is a positive rollover balance of $3.3 million in 2010.
The positive remaining balance for 2010 is due to a $920,000 one-time federal stimulus payment and $2.4 million in rollover savings due to cost-cutting measures.
Those deficits are for the city's $85 million core operating budget. Forty-seven percent of that budget comes from property taxes, 28 percent from sales tax, 3 percent from federal sources, 3 percent from state sources, 4 percent from investment income, 6 percent from fees, 1 percent from penalties and fines and 8 percent "other."
In 2010, 30 percent of that is budgeted to education, 45 percent to city personnel, 19 percent to commodities and services, 5 percent to capital transit, and 1 percent "other."