Ann Arbor council asks administrator for plan to trim employee costs

City Administrator Roger Fraser listens Monday night as council members give him direction to come up with a plan for trimming non-union employee compensation.

Ryan J. Stanton | AnnArbor.com

That directive came in the form of a resolution approved by an 8-3 vote of the Ann Arbor City Council. Fraser now must come back to the council in April with plans for trimming pay and benefits for the city's 180-plus non-union employees, including himself and the city attorney.

The approved resolution focuses on non-union employees because those are the costs city officials have direct control over. Officials hope reductions in wages and benefits for the city's unionized workers also can be negotiated at the bargaining table in the coming weeks.

Before reaching a decision on Monday, council members debated at length the semantics of the resolution sponsored by Council Members Marcia Higgins, D-4th Ward, and Stephen Rapundalo, D-2nd Ward.

Mayor John Hieftje at one point bemoaned the fact that it was taking so long to reach a decision and sarcastically opined it was going to be a "fun" budget year.

Most of the debate centered around whether each employee individually should take a 3 percent cut in pay and benefits, or whether the goal should be simply cutting the collective cost of all non-union employees by 3 percent - meaning some employees could see lesser cuts than others.

A successful amendment offered by Council Member Christopher Taylor, D-3rd Ward, preferred the latter, giving Fraser the discretion to determine how to reach a 3 percent total compensation reduction.

Taylor acknowledged there might be situations where a 3 percent pay cut to a low-income employee could be onerous, and other situations where a more highly compensated employee could stand to take a 5 percent cut. He said the administrator should be able to exercise those options.

The resolution specifically asks Fraser and other senior city management to show leadership by accepting a 3 percent reduction in compensation. In Fraser's case, not including changes in benefit levels, that means about a $4,361 pay cut.

Fraser previously declined to say whether he would be willing to take a cut when the issue arose last month.

Another revision made on the floor Monday night stripped the resolution of a clause that asked all council members to give up 3 percent of their pay. It also eliminated a sentence that asked the mayor to give up his $1,000 travel budget. A majority of council members thought the mayor should be able to travel around the state to represent Ann Arbor, despite the city's budget challenges.

Council Member Sabra Briere, D-1st Ward, said Monday night she thinks the city's top management can stand to take higher pay cuts than 3 percent.

Ryan J. Stanton | AnnArbor.com

A majority of council members have already voluntarily agreed to give up 3 percent of their pay. The only two that haven't are Council Members Mike Anglin, D-5th Ward, and Stephen Kunselman, D-3rd Ward.

With their resolution reworded, Higgins and Rapundalo ended up voting against it. Higgins said she thought the intent of the resolution changed too much. Council Member Tony Derezinski, D-2nd Ward, cast the third no vote.

Council Member Sabra Briere, D-1st Ward, offered an amendment to the resolution that was turned down. She said 3 percent wasn't enough of a cut, and it should be 5 percent minimum.

"I felt very strongly that we really needed to be much more serious about the salary and compensation package," Briere said. "If we're not more serious than 3 percent, I didn't think we were going to make a big enough dent in the budget."

An analysis by AnnArbor.com showed it would take a 6.7 percent reduction in the base wages and benefits for all city employees to achieve a savings of $5.2 million. That's the additional amount of money the city must trim from its budget - on top of millions of dollars in cuts already scheduled to take effect July 1, including the elimination of 14 firefighters and the closure of Mack Pool and the Senior Center.

City officials say they're still trying to figure out how to avoid those cuts, but in the absence of concessions from employees, it's going to be difficult. 

Personnel costs make up a large portion of the city's budget. The average city worker is expected to cost the city $103,769 in base salary and benefits next year.

Within the resolution approved Monday night was a directive to eliminate each council member's $560 travel budget, which will save $5,600 next year.

The budget directive resolution evolved from an earlier version that was tabled by the council last month. Rapundalo and Higgins worked with Fraser to revise its wording to focus on total compensation, instead of just pay.

Another clause was added to direct the city's administration to strive to establish equal health care benefits for all eligible employees by July. Currently, the city has five different plans and there are large discrepancies in the amounts that different labor groups pay for premiums and deductibles.

Fraser said the goal will be to get those unions that are enjoying a "free ride" on health care to start paying the same costs toward benefits as the city's non-union employees and Teamsters bargaining units.

Ryan J. Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.