Napa officials proposed a revised budget to City Council Tuesday night that, if adopted, would balance the projected $20 million budget shortfall caused by the coronavirus. It would also cut a total of 70 positions from city government.
The plan includes 39 layoffs of current employees, combined with hiring freezes for 31 vacancies.
Parks and Recreation would be hit especially hard, dissolved as a standalone department with its responsibilities divided between Public Works and Community Development. Current director John Coates would retire. In addition, the current Human Resources director role would be eliminated with those operations moving to the office of the Assistant City Manager.
“To all Napa employees watching, I want them to know they have good bosses … who show great care and great compassion,” City Manager Steve Potter said of the “many, many hours” spent discussing potential ways to address the anticipated shortfall. “It wasn’t fun being in the room, but I wish they could’ve been there to see the care that was expressed.”
But Amanda Steiner, the field representative for the local chapter of NCEA-SEIU, one of the six labor unions that represent Napa city workers, says such sympathy is hollow if it results in a “rushed” decision to cut 16.5% of the city’s workforce.
“Executive management aren’t the only people who plan for the future. This changes the trajectory of people’s lives,” Steiner said.
Council approved measures on April 7 to address the $10.5 million in anticipated revenue loss for the fiscal year that ends June 30 through one-time cuts of the City Hall and Dwight Murray Plaza projects, a reduction in department spending and the use of $4 million to $5 million in reserves.
Finance Director Bret Prebula and Potter both emphasized they had been able to fill that gap without going to labor unions, but felt the challenge posed by next year’s continued economic fallout now required labor’s cooperation.
Prebula said COVID-19 has decimated the local economy, which relies heavily on tourism spending, forecasting a $15 million drop-off in projected revenue from transient occupancy tax and a $5 million reduction in projected sales tax revenue.
In addition to the layoffs and unfilled vacancies, he proposed a combination of one-time cuts including reduced reserve spending, cutting service contracts and cancelling public events and recreational programs as well as a handful of ongoing measures to make up the expected $20 million shortage in next year’s General Fund. Members of the city’s executive team have committed to take pay cuts as well.
“It will impact some more seriously than others”
When the time came to discuss layoffs – considered a cost-cutting tool in the “ongoing” bucket – Prebula said the team had tried to reach the target number using only a hiring freeze, but was unable to get the kind of savings he deemed necessary.
The collective 70 positions will result in an estimated $8.6 million in savings, according to Prebula’s projections.
“No department will not be impacted. It will impact some more seriously than others,” he said.
According to Steiner, the labor bargaining units have been largely shut out of the process. She said they’ve received no list of the positions at risk of being cut, and described interactions with the city over the last four weeks of ongoing negotiations as “obstructive” and indicative of a “changed dynamic between the city’s executive teams and the unions.”
“[They’re] not being forthcoming with employees, they’re not providing information, and they’re being combative in a process where they want to gain compliance or cooperation,” she said.
The Register obtained a series of communications from NCEA-SEIU to its members from a group that calls itself Napa Watch 44. It details requests as early as April 10 for detailed information behind the city’s projections, comparison scenario modeling and an explanation of what the letter describes as an “apparent discrepancy” between the emergency reserve number presented to City Council and the one listed on the city’s mid-year financial report in December 2019.
According to Steiner, they haven't received all the information despite repeated requests, and what they have received has often been provided with little time to prepare before the next meeting between the city and bargaining units. “To all of that, we’re told ‘that’s none of your business, that’s for internal deliberations,’” she said, adding that her conversations with other labor unions suggest they’ve had similar difficulties.
Prebula, though, says the city has never intentionally delayed or withheld any information from any of the bargaining units. "They may not like or agree with the information that's presented, but it's our intent to work with them as best as possible, and we're being transparent," he said.
The Finance Department, he adds, is also working with six different labor unions that ask for a variety of information all at once, which can sometimes be why the city can't respond to requests immediately.
"We're not trying to hold anything back," he said.
Lisa Cody, one of the union’s researchers, said she believes there’s more explanation that should come from Prebula about the city’s financial situation, pointing to how the discussions center on revenue loss as compared to the budget as opposed to the actual amount of money in the bank.
“The lives of these people are on the line. It needs to be about more than just expressing sympathy,” Cody said of her hope that the emotional support council members showed Tuesday night will translate into asking probing questions of city officials.
Cuts in employees mean cuts in services
Despite the evident tension between labor bargaining units and city officials, there’s one thing everyone seems to agree on: cutting staff will inevitably compromise the quality of services to Napans.
Prebula cautioned that there will be “less capacity to provide services” and that people can expect things to happen slower. “There’s a threshold that’s hard to pass when you don’t have the same individuals in the building as we did before,” he said.
Though he expressed confidence technological advancements and changes in delivery models could eventually mitigate some of the impact, he said that in the public sector, in particular, a “balance of technology and human beings” is important.
Steiner said benefits and wages for employees account for the largest expense line item in any organization – it’s nearly 80% of the annual budget in Napa, according to Prebula – but that’s because they’re directly responsible for high quality services.
“If you cut employees, you cut services,” she said. “To me, this number (of layoffs) says somebody thinks the agency’s overstaffed. That’s ludicrous. There’s not a lot of fringe around the edges for these employees to take on more work.”
Any budget revision won’t be adopted until the City Council meeting on June 2. Council members unanimously expressed the desire to hear other alternatives that would turn to layoffs only as a last resort.
Councilwoman Mary Luros was the first to say she was open to using more of the reserve funds, but was quick to add she’d only be willing to do so if labor bargaining units would offer up concessions to match. “I think that’s a reasonable start,” she said, adding everyone should expect to have to make some sacrifices and that she’d hope nobody would expect their COLA, the annual cost of living adjustment in salary.
Prebula has voiced concerns about dipping too far into emergency reserves because that money is likely to be needed as a cash flow buffer for dried up revenue from hotel and sales taxes. Without that money, he cautioned, the city could have to take out short-term loans to fund day-to-day expenses.
Councilman Scott Sedgley, who called these discussions some of the most “heart-wrenching” in his tenure as a council member, pleaded with the bargaining units to “work with us” on concessions because “that’s where the money is” in order to avoid having Parks take “such a big hit.”
Labor bargaining units have a number of concessions they could propose including furloughs, reduced work week, COLA sacrifices and government office closure. Steiner says her union is hesitant to commit to any concessions without knowing that doing so will save jobs.
“We aren’t saying we absolutely won’t make concessions, but we want to be convinced they’re needed and … if we’re going to take a pay cut, we want to know we’re doing it to save the next soldier,” she said.
Steiner said her unit had received no specific requests from the city for concessions. Rather, she said, they received a blanket request about what they were willing to give.
Ordinarily, Chambers would be packed for a meeting with city employee lay-offs on the agenda. Shelter-in-place guidelines meant City Council and staff instead discussed the proposed budget revision among themselves with the public tuning in via Channel 28 or the internet livestream. Anyone who wanted to comment did so over the phone or in an email sent ahead of time.
Council will receive an updated proposal at the next meeting on Tuesday May 19. Prebula also committed to reporting back to council regularly once the eventual budget is adopted so members can “continually monitor and make adjustments” as the fallout of COVID-19 evolves.
Editor’s Note: Because of the health implications of the COVID-19 virus, this article is being made available free to all online readers. If you’d like to join us in supporting the mission of local journalism, please visit napavalleyregister.com/members/join/
You may reach Carly Graf at firstname.lastname@example.org; 713-817-4692; or via Twitter @carlykgraf.
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