McGinn's right: city employment levels matter

When he talked about the need to reduce 200 high-ranking positions, Mayor Mike McGinn provoked some city employees into setting up their own Web site to complain. But tough decisions are what the city needs.

Seattle City Hall: in need of change inside?

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Seattle City Hall: in need of change inside?

Al Gore pointed to an inconvenient truth about global warming, but his message never mentioned the damage from an inconvenient recession.

Seattle's city budget deficit is at least $40 million with a strong potential to become more like the $50 million for next year, a figure that Mayor Mike McGinn mentioned in his state of the city speech. Complicating matters, outgoing Mayor Greg Nickels, in his eight-year administration, added nearly 1,000 new city employees.

It's now new Mayor McGinn’s task to provide the leadership to slash the $40 to $50 million from the city budget he will propose later in the year to the city council. He will attempt this without either the experience or the wisdom of Dwight Dively. In a move that has surprised everyone, veteran city budget leader Dively has taken the job of director of finance for King County. The move, a stroke of administrative genius for county Executive Dow Constantine, is a colossal loss for McGinn. Why McGinn failed to appreciate the value of Dively to help the city survive the next few years can only be explained as a rookie misjudgment.

Neither McGinn nor the council can escape the reality of a faltering economy, however. Typically governmental solutions in hard times are to look for ways to raise taxes and to cut critical public services, but never to make fundamental changes in the cost of government. When the private sector faces similar choices it cuts pay, employees, and benefits. If these businesses fail to act, bankruptcy is often the result.

While elected officials cling desperately to the notion that a yellow brick road lies just ahead, the business world cannot. But rescue for the city government isn't going to appear in time for the next budget. Local unemployment hovers around 10 percent. Housing prices haven't yet rebounded to their former level, and vacancy rates in the downtown core are now above 18 percent. A variety of city revenue sources have declined by an average of 35 percent in recent years, according to a city handout given to neighborhood activists two months ago. Sales taxes in all but two categories have declined, some as much as 25 percent.

In a perfect world, the council and the mayor collaborate to reach workable budget solutions. After the mayor gives the council his budget proposals, hundreds of people asking for city funding show up at city council hearings. Not to be overlooked, there are 24 unions representing a variety of public employees from engineers to firefighters to police officers.

The reality is that a very large part of any city workforce is under one or more union contracts or work agreements. When the coffers were flush with money, work agreements and union contracts were negotiated with optimism and amazing generosity. Public officials seeking reelection, and unaccustomed to the realities of profit and loss in the private sector, caved in during labor negotiations. While this practice has been true nationwide, it's especially true in Seattle.

With union contracts and work agreements in place, the ability of a city to reduce spending is severely limited. During Mayor McGinn's campaign, he and his staff gathered information on the city’s spending and McGinn talked about the need to trim some spending from the more highly paid employees. When making campaign speeches, one assumes, he reasoned that the employees who provide more direct services to the public should stay, but that there was fat that could be trimmed without eliminating services. In practice, he might have meant that the person who dumps the garbage can in your park should be retained, while some very expensive policy analyst should look for other employment.

McGinn first pointed to the nearly 684 city employees who make more than $100,000 per year. After his election, he said he would look at all the top jobs and make an effort to find 200 people who should make less or look for other work.

It didn't take long to hear cries of anguish from the ranks of city employees who felt their jobs were at stake. As a result of the threat of losing their jobs or having pay cut, some Seattle city employees have formed an organization called Working Seattle. They claim they have been unfairly targeted to lose their jobs.

Local public employee union newsletters reacted strongly at a time when the leaders of large, private-sector unions like the UAW have been warning their locals they may need to renegotiate some of their contracts or facing losing jobs altogether.

While private sector unions have lost some of their power and influence, public sector unions are growing in size, pay and benefits. In 2009, public employees accounted for over half of America's unionized employees.

Politicians so far have been reluctant to deal with the inconvenient truth that overgenerous contracts have collided with the reality of cities and states in recession. Unions can poison a reelection campaign. As a rule, politicians find it easier to reduce public services or raise taxes or fees, rather than reduce pay or benefits,

But the pay and benefit questions are too big to ignore entirely in this recession. So, typically, politicians have resorted to non-decisions. The norms nowadays are hiring freezes, staff reductions through attrition, requiring employees to take furloughs, and leaves and vacations without pay.

Seattle as of late 2008 had 11,201 employees with a payroll of $743 million, and the 2009 figures were likely larger. The top 100 highest paid public employees all make above $134,625. By far the largest chunk of payroll money goes out to employees earning roughly $65,000 to $125,000. These figures don't represent the cost to the city of health insurance, retirement, or death benefits included in some union contracts.

In all, Seattle lists contracts with 24 unions, each different. The firefighters union and the police guild have some of the most inclusive and complex agreements which cover not only pay, but a significant number of other work conditions or agreements that cover off duty work, sick leave etc.

For example, in the firefighters contract includes a health care provision that states the city shall pay "$943.11 ... per member per month for 2010." This amount is paid directly to the firefighters union. The union itself manages and contracts for their own health care plan. The city pays but has no role in how the plan is administered by the union. The plan also includes automatic increases in the city’s contribution if national health care costs rise. (Copies of all city union contracts are available online.)

According to the City of Seattle’s web site, the median salary for a Seattle household is $45,763. While these numbers are based on census numbers from year 2000 and adjusted for time, they are incredibly lower than the average pay for a Seattle city employee, which in 2008 was $66,350. If around 10 percent of our citizens are out of work, it becomes even more of a challenge for that 10 percent to pay the fees and taxes to keep the city payroll at its current level. Something will have to give.

It is no surprise that there are city departments and services with very vocal representation which fare far better when budget reductions are considered. It will take a courageous politician to do what must be done.


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Comments:

Posted Fri, Feb 19, 7:34 a.m. Inappropriate

As Mayor, I would lead an effort to unload benefit packages to the Union's--let them manage and fund them.

g

Posted Fri, Feb 19, 8:24 a.m. Inappropriate

The Union question is a tough one, in their ascendancy they were a force for economic justice of the individual citizen getting his or her fair share in the early 20th Century corporate marketplace.

But today they are entrenched and no longer serve a large majority of working folks, as such they have become a party to the larger financial malfeasances of Corporatist America, post Reagan. Their culpability does not come close to that of the bonus taking investment bankers and the 'takeover' corporate lawyers, but they are beneficiaries.

Solving the Union problem as our economy continues its long term realignment is an important task - and if they wish my sympathy they need to start calling for the accountability of those Wall Street and DC Con men, as well as their local agents.

Posted Fri, Feb 19, 8:58 a.m. Inappropriate

Most people are not complaining about the idea of cutting costs by reviewing positions, salaries and benefits. The problem is how ham-handed McGinn was in his approach to the issue. As for salaries, they may be a little high - but only a little. The median salary at the city is high because most city employees are highly educated. The simplistic comparison presented is not helpful. Try making apples-to-apples comparisons for similar jobs and responsibilities. The biggest savings can be had by streamlining processes not by cutting across the board. As an architect, I can tell you that getting a building permit just gets more complex and expensive every year. DPD is under no pressure to figure out how to do things more simply. See #4 & #5 at http://lightandair.wordpress.com/2009/12/03/supporting-seattle%E2%80%99s-progressive-aspirations/.

Posted Fri, Feb 19, 9 a.m. Inappropriate

Comparing government to business is a false comparison. Sure businesses cut staffing costs during a rececession. They do it because the demand for their products and services goes away.

The same is not true of government services when the economy is in recession. Actually, in the case of government, the demand for services either stays the same or goes up. Think it through. Does the demand for police services go down? Or for educational services? Or for health services? Etc.

This places governments in a bind. At the same time that their revenues decrease, the demand for essential services doesn't. It's simply wrong-headed and irresponsible to say that like business they should slash payrolls and related essential services.

Yes, their should be some trimming, but a better choice would be modest and strategic tax increases. Yeah, I know the tea-party types have poisoned the well when it comes to talk about tax increases, but the equation is simple: no revenue, no essential government services.

Posted Fri, Feb 19, 9:51 a.m. Inappropriate

Any 'non-essential' city employee that is not missed on Holiday Monday and any snow day should be eligible for 'reduction in force' assessment.

animalal

Posted Fri, Feb 19, 9:54 a.m. Inappropriate

As a former high level executive, now retired, I feel somewhat qualified to weigh in on this issue. While my comments in no way represent any kind of support for the current mayor (I think he's an idiot), I do want to say that there ARE positions, executive, mid-level management and below, that can be eliminated without disruption to the city's work.

There is a lot of deadwood in the ranks. It is impossible to fire bad workers because of unions, affirmative action goals, ridiculously complex and complicated personnel rules. The emphasis on diversity and affirmative action puts hiring and promotions at a standstill, thereby leaving departments staffed with unqualified and inefficient workers.

If city departments could run their organizations the way private business does, staffing levels would be appropriate to the work needing to be done, only employees who work efficiently and effectively would be on staff, and outrageous waste for paid time off, paid travel and training, and paid time to attend Combined Charities and Hispanic Employees Association meetings, etc. would cease.

Posted Fri, Feb 19, 10:36 a.m. Inappropriate

It sounds great to say "tough decisions are what the city needs." It sounds macho, in fact. But if the person making the decisions doesn't discuss the problem before making the decision, they begin to appear stupid rather than "tough".
McGinn has made several "tough" decisions since taking office without any discernible process. From my perspective, his decision to cut off health insurance of employees of the previous administration looked vindictive. His decision to build a seawall appeared to be an indirect way of undermining the replacement of the viaduct.
I'm sure there are ways to reduce city staff, but his sweeping declaration about getting rid of one pay grade seems like a way to avoid the really tough process of discussing, listening, and recognizing that others have something to contribute besides McGinn and his hangers-on.

McSkeptic

Posted Fri, Feb 19, 3:15 p.m. Inappropriate

Any organization must live within its budget. Period. It does not matter if it is a business, a city or a charitable organization.

The City Seattle must cut. Of course, everything the city spends money on helps someone. But this money comes at a cost. This is not a utopia. Make the hard decisions. Make the fundamental changes to get Seattle back within its budget. I am a businessman. I have seen many business make very tough choices in the last 18 months. The city of Seattle is not exempt from tough choices. Get to work, cut spending, balance the budget.

And a question: Why can't union workers compete in the free market like everyone else?

Why do workers need to join a union in order to get a job with the city?
If the union does not get what they want, they threaten force. This does not seem right to me. Union workers get better pay and better pay at the expense of everyone else. This is not fair. Can someone tell me why these workers must be in a union in order to work for the city? Seems like a good solution would be to get rid of the unions.

taupe

Posted Fri, Feb 19, 6 p.m. Inappropriate

Good piece, Kent. Speaking of office vacancies, how much of the Municipal Tower is occupied?

kieth

Posted Fri, Feb 19, 6:25 p.m. Inappropriate

The comparison between public/private compensation is fundamentally meaningless. Examine the social policy undergirding economic policy and it becomes clear that the growth in government employment serves to sop up the over-capacity of "professionals" generated by the Education Industry. Bluntly, government employment tends to be a default position. Evidently, its far easier to extort the tax-payer, than find employment at a "market rate" in the private sector. Either way, the mere possession of a college degree does not entitle anyone to anything. The value of a degree has been largely over-valued--government employment contributing to the skew-- and is rapidly depreciating along with similar financial instruments, as journalists turned bloggers can attest.

g

Posted Sat, Feb 20, 11:15 a.m. Inappropriate

I was the Chairperson of the Pike-Pine neighborhood group for about ten years and had a lot of dealings the City at all levels. I have no doubt that there is deadwood. The task is to sort out who is valuable and who isn't, not sort by category or wage level. It would be suicidal to toss out any of the great, reliable, helpful and friendly people. Such people, with experience and hard-won knowledge, are very valuable. The people who won't give you the time of day, don't know how to do thing--and won't find ou--how can go. Another clue to those who are keepers might be check on all the people you cannot find on Fridays. I used to not even bother trying to get hold of anybody on Fridays except those at lower levels, the 9-to-5ers.

jilljanow

Posted Sat, Feb 20, 12:21 p.m. Inappropriate

From IBD today, another reason it might be useful to cut down of far-seers:

"we're asking regulators to do the impossible: see in the present the problems of the future.
In that sense, when politicians and commentators complain about regulatory failure, they're in truth paying those who supposedly failed the highest of compliments whereby they ascribe to the prosaic government bureaucrat a level of intelligence that logic tells us is nonexistent."

A conundrum of sorts.

afreeman

Posted Sat, Feb 20, 5:46 p.m. Inappropriate

"The median salary at the city is high because most city employees are highly educated."

So, let them earn their high pay for a change. They shouldn't have been allowed to become an entitled class, as I think they have. (Besides, shouldn't the 'Mt. Rainier factor' mean they'd be willing to get paid less just to live - and influence things - here?

Productivity and effectiveness is all that matters, not how 'highly educated' someone may be. Do these folks put their diplomas on their office walls to make them feel superior?

Sheesh....

Posted Tue, Feb 23, 6:42 a.m. Inappropriate


Kent -- Make whatever political points you want but at least get the facts straight.

The 2002 Adopted Budget, which was the last one done under Mayor Schell, listed 11,081 FTEs. Of these, 470 were in the Library. Library positions are no longer in the City’s official position list, so for an apples-to-apples comparison the 2002 number should be 10,611. The 2010 final budget had 10,798 FTEs, for a net growth of 187. During this period, at least this number of new positions were added in response to the Glaser lawsuit on temporary employees, these positions weren’t really “new” but simply recognized as FTEs. So, a fair assessment would be that total City employment is about the same today as it was in 2002, although there was obviously some moving around of positions: more police officers, for example.

I saw your 1,000 figure and have no idea where it came from.

Posted Tue, Feb 23, 3:01 p.m. Inappropriate

I'm not sure what your comparison of the median salary for Seattle households ($45K) to the average city employee salary ($66K) tells us about the fairness of the city employees' compensation, but it is an eye opening figure. In these challenging times, as you say, the city needs to make cuts. But it may also need to assess options for retaining its workforce and renegotiating union and non-union contracts with lower salaries. A substantial disparity exists between the incomes of the taxpayers and their civil servants is not healthy for the workers in our city.

Posted Tue, Feb 23, 9:25 p.m. Inappropriate

I agree. The people who are profiting by the expense will defend their turf to the end, for few will admit that there's waste in their job, or that their job's not needed. All government entities should be required to make more information public, from an income statement to a list of major purchases to a list of their highest-paid officials. Speaking of which, it was an excellent point whether citizens who, on average, are paid less than the average city worker, would be willing to pay to protect the latter's considerable pay and benefit package. Both of these, along with pay and labor practices, tend to get hidden from public view, making one wonder what the higher-ups' definition of "service" - as in public - really is. Specific transparency should be the requirement for any entity run on public funds. Unfortunately, the present situation means that many in the public accept that the entity is running as best it can and that the only solution is to raise revenues. Most entities aren't used to being told no, but it looks like it's going to be more commonplace.

bricsa

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