Contracts put budget in the red

Fremont’s new contract agreements with its employees will cost taxpayers roughly $2.6 million more than what was budgeted for this fiscal year, but officials say programs and services won’t be cut to accommodate the extra spending.

The Fremont City Council on July 11 approved twoyear contracts for all nine of the city’s labor unions, which include public safety employees, office clerks, managers and maintenance workers, among others.

Although the recently adopted 2017/18 budget contained what officials call “placeholder” cost increases in anticipation of salary negotiations, some contracts — especially for police officers — ended up costing the city significantly more than what was allocated.

The city had set aside about $660,000 for increases to the Fremont Police Association contract, which covers 180 officers and sergeants. However, the salaries and benefits eventually negotiated will cost an additional $1.2 million this fiscal because officers and sergeants received 5.5 percent increases.

Deputy City Manager Brian Stott said the salary raises were meant to cover not only cost of living adjustments but also to help the police force remain competitive in attracting good officers.

With the addition of three positions for a new police mental health mobile evaluation team, the department has 21 vacant police officer or sergeant positions. Stott said those numbers reflect an industry-wide challenge in recruiting and retaining officers.

He said when compared with 11 other local agencies, Fremont’s total compensation for officers was found lagging.

Officers and sergeants will also receive health benefit increases, and senior officers and detectives will get an extra 2.5 percent bump.

Police management, which includes 11 captains and lieutenants, also will receive a 5.5 percent salary raise this year, along with health benefit increases.

Members of the local firefighters union, which represents 126 firefighters, fire engineers and fire captains, will receive a 3 percent wage increase this year. Along with health benefit increases, education incentives and disability pay, the total compensation will cost the city $396,000 more than the $483,000 budgeted.

The increased commitments to the fire and police departments represents about $1.7 million of the $2.6 million the city needs to come up with this fiscal year, which began July 1.

Public safety agencies are “primarily, if not 100 percent,” paid for out of general fund money, Stott said.

He said some of the costs of other employee union contracts could be absorbed by specific funds such as those for recreation, development and human services.

No services or programs are expected to be sacrificed to pay for the additional costs, he said, noting that the difference “most likely will come from a combination of higher than anticipated revenues, coupled with expenditure savings.”

He acknowledged the city does not currently “have any information to suggest that we are going to have higher than anticipated” revenues. He said the funding picture will become clearer as final tallies of property and sales taxes — the city’s primary revenue drivers — come in within a month or so.

Though he doesn’t think it’ll be necessary, Stott said the city could cover the added costs with one-time funds if forced to.

The second-year pay and benefit increases of these various contracts will cost the city an estimated additional $4.75 million in fiscal year 2018/19, according to an analysis of city staff reports by this newspaper.