Layoff Notices

Today, 248 city of Manteca employees will be receiving a notice that they may be laid off from their job in 30 days. While only 40-50 employees could potentially lose their jobs, our employment rules require me to send a notice to every employee who could possibly lose their job. This was an incredibly difficult decision, by far the toughest thing I've had to do in my 30 years in local government. However, the current economic malaise left me no other options.

The good news is that each employee bargaining unit has the opportunity to retain their employees. The actual decision is not up to me, it is up to each bargaining unit to decide if losing a small percentage of their take home pay is more important than their co-workers job. As I was quoted as saying in the Sun Post, we don't have a staffing problem, we have a salary problem. I'm proud of the fact that our employees efficiently operate this city with far fewer employees than many similar cities. I don't want to lose any of our employees because it is going to create a real burden on those who are left. Our constituents expect the same level of service whether we have 375 employees or 325 employees.--and I'm going to demand that our managers continue to provide equivalent service with less staff.

We have a salary problem partly because we have a challenging revenue problem--and partly because our salaries have begun to closely mirror bay area wages instead of valley wages. Trying to pay bay area wages with valley revenues is not an economic model that can be sustained--we generate about one-third as much revenue per capita when compared to our east bay brethren. Even when comparing us to valley cities, we don't have a very diverse revenue base.

Many cities have utilities taxes and/or electric utilities, parks maintained by landscape maintenance districts and a diverse economic base with lots of commercial offices, retail and industrial space. While we are beginning to diversify our economic base, we've got a long way to go. Our city is heavily dependent on property tax and sales tax. I've chronicled in this blog many times the troubling trends for these two revenue sources--and these trends aren't going to change any time soon!

Let's not kid ourselves, the economic fortunes of the northern San Joaquin Valley are not going to change in the near future. We are still seeing massive numbers of foreclosures--San Joaquin County is back to being the number one foreclosure market in the country (click here for latest data). Our unemployment rate is heading towards an unthinkable 20 percent with the closing of the NUUMI plant in Fremont. With jobs continuing to disappear, the economy can only continue to decline. As the economy continues to decline, property values will continue to drop and retail sales will continue to suffer. The only reason it hasn't been worse is due to the federal stimulus package. Without a second stimulus package, many government and private sector jobs will go away.

In the face of the worst economic calamity since the great depression, I'm mystified that many of our employees can't accept the fact that compensation has to be reduced. I would challenge any of our employees to find any private company in San Joaquin County that hasn't reduced total compensation to their employees. And if you can find one, I'm sure there are 999 others that have reduced compensation--and I'm sure they've reduced it far more than what I'm requesting of our employees.

As I noted in Tuesday's blog, our workers have been well compensated over the past 15 years--receiving wage increases at nearly twice the rate of the average resident--and have received an enhanced retirement to boot. During better economic times, our employees were able to share in our increased economic strength. In tough times, our employees need to share in the pain and suffering as well. Frankly, we don't have any choice. Unlike the federal government, we can't print our own money. At the end of the day, we have to balance the budget.