NCT Encinitas employees get 3.5 percent raises
The City Council on Wednesday approved 3.5 percent salary increases and improved retirement benefits for Encinitas and San Dieguito Water District employees for the next four years.

The vote was 4-0. Councilman Dan Dalager was absent.

The pay and benefit increases are retroactive to Jan. 1 and are expected to cost nearly $753,000 through the duration of the contract.

The city's personnel officer, Tom Beckord, told the council that a four-year contract spares the city from consultant fees and staff time needed to negotiate labor agreements.

Some activists, however, said the city should rethink a four-year agreement because of the housing slump, unemployment and other economic uncertainties.

"If I were in private business, I would not lock in the kind of increase you're considering now," said Gerald Sodomka of Cardiff.

Note: Several residents publicly requested the contract be amended. I also petitioned the council, but my reasoning differed from some speakers.

The last contract was for no more than 3 years and the new contract is for 4 years. I suggested a shorter contract or a contract with a clause allowing the terms to be revisited if the economy doesn't hold.

The administration's financial leaders are telling the public that if a few key adjustments are implemented the economy will turn around. Right now the foreign markets are not convinced we will or can make it happen. There is also concern that the Fed could make things worse by vigorously trying to stave off a recession. Others believe structural problems in the economy will make it harder for those adjustments to get traction.

As Council Member Bond pointed out, the city has a notable stabilization fund that can be tapped if revenues come in short due to a short economic recession. Regrettably, the council doesn't seem to realize that avoiding a budget squeeze is not the only reason to have gone with a shorter contract.

This is a time of great economic uncertainty due to problems in the financial industry, a downward dollar, and a sinking housing market. City management does not seem to want to fully recognize the potential for trajectory changes in the economy. Conversely, city employees have more situational awareness.

Unfortunately, at this time it is unclear what the labor market might look like in 1, 2, 3 or 4 years. In two years we might find that a 3.5% raise will be considered lavish.

We do know that, generally, public sector employees now have salary and benefits that exceed the private sector. In hard times it will be tough for the unions to bargain for raises exceeding salary increases found in the private sector. The union probably knows this and they wisely "negotiated" a contract that will get their union members through the rough spot unscathed. That is probably why there were audible, but restrained, cheers from staff when the council gave them 4 years of unconditional raises. It should be sobering to the taxpayer that staff actually cheered the council's unanimous decision.

No one on the council applied business sense to this decision.

See Also: Dalager Vote Note.