SR city workers win pay raise

More than 200 Santa Rosa employees, including 14 department heads and mid-level managers, have won pay raises that will kick in over the next two years.

The raises total 8 percent but will be implemented incrementally, with a 2 percent increase this July followed by identical increases in January and July next year and again in January 2009.

The raises will cost the city $469,000 in the 2008-09 fiscal year that begins July 1, a year in which the City Council must make $8 million in budget cuts to balance its projected 2009-10 budget.

The city's 14 department heads, however, unanimously agreed to postpone until January 2009 and 2010 their 2 percent raises, set to go into effect this July and next July. Those January raises will then equate to 4 percent each.

"They recognize the city is heading into difficult financial times, and they wanted to set an example," City Manager Jeff Kolin said.

The new round of raises come just four months after the council approved similar raises for 450 city workers divvied up among the city's professional, technical and clerical unions.

Human Resources Director Fran Elm said the city still has to settle contracts with unions covering 350 employees.

The raises come at a time the city is in dire financial straits and city leaders are considering some sort of tax measure for the November ballot to help prevent job and service cuts in the coming year.

The raises drew criticism from council watcher Jack Osborne, who questioned the wisdom of the decision in the face of a poor economy and recent news that labor contracts were the driving force that pushed Vallejo to file for bankruptcy.

"You didn't learn from Vallejo, did you?" he asked the council rhetorically Tuesday.

"You don't know what the economy is going to do. Unemployment is rampant, housing prices are doing down, and you're giving raises," he said.

Kolin, however, said Santa Rosa is protected from becoming another Vallejo because it has more than $20 million in cash reserves, has labor contracts not nearly as expensive as Vallejo's and has a more diversified economic base.

Kolin said the raises are necessary despite the financial crunch. "It's important to fairly compensate our employees, particularly at a time when we will have to consider reductions in our work force and we ask our employees to do even more," he said.

Kolin said if the city does put a tax measure on November's ballot, it will have to justify the need.

That will involve convincing voters the city "has done an effective and efficient job" of providing services, despite critical drops in sales and property tax revenue and development fees, he said.

One key component of the new two-year agreements is a provision that new employees of the bargaining units receive reduced retirement benefits.

Elm said that agreement will go into effect only if all the city's bargaining units, except police and fire, agree to it. So far, all bargaining units that have settled with the city have agreed.

Elm said if all do, it could save the city $1.9 million annually by the fifth year as new employees replace retiring workers.

Kolin said police and fire are not included because those units have separate contracts with the city and the state's retirement system.

You can reach Staff Writer Mike McCoy at 521-5276 or mike.mccoy@pressdemocrat.com.