Citizen's View: Tax increase may be needed if City doesn't cut employees
As a member of the Citizens Budget Committee, I take the task seriously. Im not sure all members of the committee do. My committee role, I believe, is to help provide the services citizens want at the lowest possible cost. That provides good stewardship of our tax dollars.
During a recent committee meeting, I made a motion to reduce the number of our City employees by 2 percent a year for the next three years. My motion was defeated 8-5, with all members of the City Council and the mayor voting against it. Let me explain my motion and why I believe it is very important to every taxpayer.
City headcount peaked at 363 in 2012-13. Since then, it has dropped to 347, a reduction of 16 (or 4 percent). But of concern is the plan for the coming fiscal year. The plan is to drop to 344.8 (from 347.3) a drop of 2.5. That seems good, but it is not. There is already a drop of three in the Lake Oswego-Tigard Water Partnership as it winds down. But since the overall headcount is only going down 2.5, there is actually an increase half an FTE.Half a person does not seem like much. But now lets get to the rest of the story cost per employee.
In 2011-12, an average City employee cost $108,000. For the 2016-17 budget, the number has reached $131,800 an increase of $23,800 a year or 21 percent. Headcount is dropping slowly, but our cost per employee is rising much faster!
Employee costs are more than 80 percent of our Citys total budget. Benefits are approaching 75 percent of salary and are going to increase. PERS is expected to rise at 7 percent a year and health care is going up as well.
Our City is going to reach the point where taxes will have to go up to pay for employees. In fact, the city manager hinted at this in one of his presentations to the budget committee.
We say we have needs more street maintenance, park maintenance, etc. But we also say we do not have the money for these activities. Why dont we have the money? Because our City leadership, the mayor and the City Council, has not made cost management a priority.
Opportunities for cost reduction abound, based on my experience in business. For example, the routine commodity work of cutting grass and trimming bushes could be outsourced (and partially are). Why does it make sense to spend more than $130,000 a year for someone to cut grass? (It may actually cost less, depending on the salary of an individual employee.)
Talking to a member of a board overseeing a City function, I learned that department managers will NOT take action to reduce costs unless told by the city manager to do so. But why hasnt the city manager installed a cost-reduction program? Because our City Council and mayor have not made it a priority.
Look at their priorities for this year is cost reduction there? Why not?
Some argue that any reduction in headcount means a reduction in services. Such a statement demonstrates incompetence. We could eliminate everyone doing job x and replace them with an outside firm; there would be no reduction in service.
By not initiating a cost-reduction program, a tax increase will not be too far off.
Lake Oswego resident Gerry Good is a member of the Citizens Budget Committee and the Lake Oswego Citizens Action League Leadership Committee.