Leaders approve $2 million in employee raises on same night as sales tax measure

MILPITAS >> On the same night Milpitas officials decided to place a sales tax increase measure on the November ballot to shore up revenues they say were deva stated by the corona virus pandemic, the City Council approved $2 million in raises over the next three years for city maintenance workers.

Tuesday, they finalized the salary adjustments on the city’s books after voting at its Aug. 4 meeting, without any discussion, to approve a newly negotiated contract with the Milpitas Employees Association, which represents 52 employees in the city, including mechanics, custodians and water meter readers, among others.

With the earlier approval, those employees received a 6% raise as of July 5 of this year and 3% raises for the next two years, as well as a one-time lump sum payment of just over $92,000, and nearly $60,000 worth of increased health benefits over the three years.

In addition to the raises and increases in benefits, the city agreed to spend about $5,600 to ensure every employee in the union gets a Gerber or Leatherman brand multitool.

This week, city officials defended the raises as necessary to put all the city’s five unions on more equal footing before the city has to make decisions on potential cutbacks and service reductions amid the continued impact of the virus and after voters decide on the quartercent sales tax measure.

The MEA contract expired in June, and other unions that represent police, fire, management and technical employees all have contracts that last beyond this year, officials said.

“It brings them back up to some level of parity with the other employee groups,” Steve McHarris, the city manager, said of the raises.

“This is the same group that got hit quite possibly the hardest during the great recession, they never really fully recovered from where they were at. So if and when we have that conversation about concessions, they’re all treated the same, they’re all treated fairly, they’re all on the same level playing field,” he said.

“If times get tough, we will come back to talk to them, but we will also be talking to all the other groups at the same time, and that includes the management team.”

At the Aug. 4 meeting, Mayor Rich Tran supported the sales tax measure saying the city is “bleeding” because of the budget impact of the coronavirus. In an interview Tuesday, he said voting for the raises on the same night was justified.

“We need to ensure that our city employees have high morale and feel compensated,” Tran said.

“These are the folks that wear steel toe boots and reflector jackets and hard hats. These are the city employees that are directly responsible for our sewer, our water, our street resurfacing, fixing potholes, picking up illegal dumping,” he said. “The sales tax measure is to fund these basic services.”

“It is a decision the city council has made and one that I continue to stand by,” he added.

“To tell one union, we’re going to hold you back while we’re still looking at this, I don’t think that’s equitable,” Vice Mayor Bob Nuñez said Tuesday in an interview.

He said in negotiations for the most recent contracts, things were “messy” due to unequal cuts made to different unions during the last recession, and he hopes by making this move now, any cuts that come out of the pandemic will be more equitable across the board.

Walter Rossmann, the city’s finance director, told the council earlier this month the city has taken a roughly $11 million hit to revenues because of the pandemic so far, in no small part because of the loss of hotel-taxes.

The city will need more revenue, or it will have to potentially cut services and lay people off, or reduce pay for employees.

The sales tax measure, if approved by voters during the Nov. 3 general election, would last eight years, raise the city’s tax rate from 9% to 9.25% and is estimated to generate about $6.5 million annually for the city. It would require a simple majority of voter support to pass.

The city already has used about $10 million in reserves to balance the city’s budget for the current fiscal year and coming two fiscal years, though the projections and assumptions in those budgets could change.

“If the voters choose not to approve the tax measure, obviously that’s a choice they’re making, and then we will have to make the choice of balancing the budget,” Rossmann said.

The raises approved Aug. 4 were put on the council’s “consent calendar,” a part of the agenda for items considered routine which are voted on as a group, without discussion.

Nuñez said this instance highlights the need to make sure the council openly discusses employee contracts when they are up for approval.

“You should have them on the agenda someplace other than the consent calendar,” Nuñez said, “because that’s how things get lost.”