MONTEVIDEO -- City employees in Montevideo were entitled to a 4 percent pay hike in 2010, but have voluntarily cut their increase in half to help the city cope with cutbacks in local government aid.
"In these tough times we all need to help out, and to pitch in together to keep making Montevideo the best city we can,'' said Steve Stand, president of the American Federation of State, County and Municipal Employees Local 1686 in a joint statement issued by the employees and city.
Most city employees are represented by either the AFSCME or the Law Enforcement Labor Service bargaining units. Employees with both bargaining units offered to cut their negotiated pay increases.
The action will save the city a projected $44,000 in the coming year, according to Steve Jones, city manager. The cut in labor costs will not make up for what the city is losing as a result of state cutbacks. The city saw Gov. Tim Pawlenty "unallot" its local government aid by $115,245 in 2009. The governor is proposing to reduce the city's local government aid by $265,914 in 2010.
Jones said he informally brought up the idea of a voluntary reduction in the pay hike to city employees while the budget-making process was under way.
Council members adopted what Jones described as a "zero-based'' preliminary budget at their meeting on Monday this week.
It calls for no new spending other than what is required to meet increased, fixed costs such as labor increases. The cutbacks in aid have forced the city to defer some of its planned long-term capital expenditures, such as replacing a fire truck.
Council members opted to adopt the special levies allowed by the state to compensate for the local government aid cuts in 2008 and 2009. With the special levies, the city's total preliminary levy for 2010 will increase by 6 percent to $1,643,740.