As Denver city officials look to close a looming $120 million budget gap, it’s clear that cutting payroll costs in such a service-intensive operation is unavoidable.
In recent weeks, Mayor John Hickenlooper has made several credible — if painful — suggestions to reduce personnel costs, including an early retirement plan and delays in police pay raises.
Unfortunately, police union members have rebuffed the mayor’s request to amend the city’s contract with police. Hickenlooper wanted to delay police pay increases next year and in 2011.
To be clear, police still would get the 4.5 percent and 3 percent raises, they just would be delayed by nearly a year.
Now, the mayor says it will be necessary to lay off some 90 officers.
In difficult economic times, everyone should expect to share in the burden of cuts. Public safety costs are nearly half the general fund, and trimming their budgets is unavoidable. It’s too bad police officers didn’t see it that way.
We don’t want to see a reduction in the number of officers on the street — no one does — but this vote by police union members will leave the mayor with no other choice.
“This is an extreme circumstance,” the mayor told us. “None of this in any way reflects a lack of appreciation for our police officers.”
By contrast, leaders of the city’s firefighters union have tentatively agreed to forgo $7 million in salary and health benefits in 2010 and 2011 in an effort to avoid layoffs and close the budget gap.
Union members are set to vote on the issue in the near future. We applaud the initial inclination toward shared sacrifice, and hope the membership vote follows suit.
Such a vote would show a recognition of the dire financial situation the city is dealing with in this recession as sales tax revenues have plummeted. Yet the city’s options are restricted because salaries and benefits comprise 70 percent of the city’s 2009 general fund budget — about $636 million of the $912 million budget.
With that in mind, we were glad to hear the outlines of Hickenlooper’s plan to encourage people to voluntarily retire from city employment. It’s unclear just how much in savings the city will glean from the plan, but it’s prudent to ask for voluntary departures first before moving on to layoffs, changes in benefits contributions, more furloughs and wage freezes.
About 960 of the city’s 11,000 employees are eligible for the deal. According to the mayor’s plan, applicants must be at least 65 years old. Or they must be at least 55 years old and meet the Rule of 75 — that is, their age and years of service to the city add up to at least 75.
Those who take the deal will get a monthly stipend of $500 for 30 months.
No one knows how many city employees will be interested, and what their salaries are. And it may turn out that the city would have to replace a portion of those workers in order to maintain even diminished government services. Perhaps replacements could be hired at a lower scale, reducing overall personnel costs.
But we’re glad to see the city taking this step toward reducing its payroll.
Hickenlooper reportedly also is considering eliminating management positions, finding efficiencies that span many departments, and declining to fill vacancies.
For a time, the mayor had contemplated imposing a fee for garbage service, but that appears to have fallen out of favor. However, other city fees might increase.
The retirement incentive proposal is set to go to the City Council’s finance committee today for consideration, and eventually would have to be passed by the entire council before it could take effect.
There is nothing pleasant about having to ask people to retire before they might have intended, delaying employee pay raises and diminishing city services.
But this recession is a deep one, and everyone should expect to share the pain.
