Cost Savings: Part 2 – by Mayor Gary Plass and Tom Chambers

This is Part 2 of the “Cost Savings” commentary. In Part 1, the councilmembers discussed factors that led to the current budget conditions, as well as actions that have been taken in the past year to address the budget issues.
Current actions of the City Council
1.    EPMC benefit elimination. With the bulk of City’s employees paying the employee PERS contribution, the City is able to eliminate a retirement benefit called Employer Paid Member Contribution. Staff is expected to complete the meet and confer process within the next month which will allow the City Council to adopt resolutions revising the benefit in June. The expected savings moving into FY 12/13 is $241,034.
2.    Employee negotiations. The City is currently engaged in negotiations with Police and Fire units. The content of these discussions will not be disclosed to maintain the integrity of the bargaining process. That said, the City Council cannot disregard the importance of parity among all units and good financial management.
3.    Shared/Contract services. For the past year staff has been evaluating opportunities to contract for services with other government agencies. These contractual relationships could result in Healdsburg utilizing another agency for services or, conversely Healdsburg providing services on a fee basis to others.  In addition, staff is comparing the cost of providing services internally versus contracting with the private sector. Prior to making a decision it is critical to look at the quality and timeliness of service. Present considerations include: fleet maintenance, building maintenance, laboratory testing and IT.
4.    Pension Side Fund. On April 2nd the City Council authorized the finance director to proceed with a refinancing of the pension side fund. This will save the City approximately $918,930 over 11 years.
5.    Fire department. On April 9th the City Council directed staff to spend the next year looking at alternate models to provide fire suppression and prevention services. Among the options identified for contemplation: contract services, a fire district, and a joint powers authority.
6.    Revenue. The City Council hired a consultant to conduct a ballot feasibility study to measure the community’s support for a potential half-cent sales tax increase. The potential ballot measure is under Council consideration. Other ideas for revenue generation being explored are: paid parking, assessment districts, fee increases and aggressive economic development programs.
7.    Second tier. The City has obtained PERS valuations for a second tier to reduce retirement benefits for new employees. As proposed, the second tier would provide a 2% at 60 formula for miscellaneous employees and a 2% at 55 formula for safety employees. It also eliminates the “single highest year” provision in favor of calculating retirement benefits on a three-year average. The second tier cannot be implemented without going through the collective bargaining process.
Future actions of the City Council
A primary focus of the City Council moving into the future is pension reform. The pension elements that can be controlled locally (retirement formula, single highest year, etc.) are being addressed. Because PERS rules, regulations and retirement options are legislated by the state government, efforts must focus on all-encompassing reform at the state level. This is a goal that will not be accomplished without considerable determination. It will require a process focused on legislative action and transformation. This Council is committed to pushing the reform agenda forward.
In conclusion, be assured the City Council will continue to move the City toward financial sustainability. The decisions made to date have been unanimous. They represent the convictions of all five council members, regardless of political orientation, employment status and reelection bids. We are dedicated to Healdsburg and will continue to work cooperatively and responsibly for the benefit of all.
Gary Plass is Healdsburg’s 2012 Mayor and Tom Chambers was the Mayor in 2011 when many of these budget actions were implemented. Part 2 will be printed next week and will include the actions the city is taking to address additional future cost savings. Both parts can be found on the Tribune’s website at www.hbgtrib.com.