Milpitas City Attorney Mike Ogaz issued the following statement today, defending City Manager Tom Williams' recommendation that Milpitas City Council lay off workers and outsource jobs now done by the Public Works Department.
City Council could decide tonight whether to follow Williams' recommendation. Public Works staff have said they plan to protest the event, similar to the protests held before last Tuesday's city council meeting.
The Public Works director resigned abruptly on Wednesday, the day after the protests.
Tonight's meeting is 6 p.m. at Milpitas City Hall.
From Milpitas City Attorney Mike Ogaz:
In his 2012/2013 budget proposal, scheduled for City Council approval on May 8, 2012, City Manager Tom Williams has proposed the outsourcing of several City functions, including street trees, parks and street maintenance. Outsourcing of these functions to the private sector will regrettably lead to the lay off of the City employees who currently perform this work. Williams had thought to avoid such a devastating measure, but was faced with a $9.2 million deficit when the California Supreme Court affirmed the State legislature’s elimination of Redevelopment in December of last year.
Faced with the need to find an additional $9.2 million, Williams considered outsourcing, and through an internal analysis conducted by each City department, determined that the largest savings could be achieved by outsourcing the street trees, parks and street maintenance work because the difference between what the City paid and what was prevailing wage in the private sector was greatest for these functions. An RFP process, where actual quotes from the private sector were received, confirmed an expected savings in excess of $2 million for outsourcing these Public Works maintenance functions.
With this savings and other budget cuts, including an additional $1.8 million cut in salaries in other areas, the budget gap will be closed. However, it will result in 52 total expected layoffs. A total of 29 of these will result from the outsourcing of street trees, parks and street maintenance functions. The remaining 23 will be eliminated from other City departments.
The City has received an Unfair Practice Charge filed by the MEA and MSA bargaining groups with the Public Employment Relations Board. This Charge claims that the City failed to comply with a 1991 Resolution (Reso. 5891) which states that outsourcing can only be done if the rate of pay is equal or higher than that of City employees. The Charge also claims the City has failed to meet and confer as required under the Resolution. For the reasons set forth below, the City believes the Unfair Practice Charge is without merit.
The City has met its meet and confer obligations with regard to the outsourcing proposal. As far back as June of 2011, in contract negotiations with both MEA and MSA, outsourcing was discussed and the City expressly agreed not to outsource so long as the State did not dismantle any part of Redevelopment. Of course we know that the legislature completely dissolved Redevelopment with devastating fiscal impact on the City of Milpitas. Again in February of this year, the City Manager invited MEA and MSA representatives to a meeting and asked that they make their own proposal as an alternative to outsourcing the maintenance functions. In the ensuing months, MSA and MEA made proposals to the City Council directly and repeatedly addressed the outsourcing proposal and their alternative plan in a series of public City Council meetings. After all this interaction, it is disingenuous of these labor unions to now claim that the City has failed to either notify them of outsourcing or to comply with its meet and confer obligations regarding outsourcing.
The other element of the Charge is that Resolution 5891 only allows outsourcing if the pay is equal to what City employees make. This is a curious provision as it completely undermines any purpose for outsourcing. As stated by consultant Jerry Newfarmer at the Council meeting of May 7th, the only reason to outsource is to save money. This provision of Resolution 5891 thus operates as a total ban to outsourcing. This may not have been fully intended by the Council in 1991, but it surely is inconsistent with the realities facing today’s City Council and the monumental budget deficit it faces as a result of the legislature’s elimination of Redevelopment. Redevelopment extinguishment could not have been forseen by the Council in 1991. It is the option of this Council to chart a different course in keeping with the fiscal realities it faces today. As such, included in the Resolution adopting the budget is a provision that repeals the barrier to outsourcing contained in the 1991 or any other prior resolution. This Council cannot be hamstrung in exercising fiscally prudent options by policy dictates from a different era.
The City Manager is doing everything he can to set a course that is fiscally prudent for the City of Milpitas. For over a decade the City has survived budget imbalance due to receipt of Redevelopment funding. No longer able to rely on supplemental funding from the Redevelopment Agency makes balancing the budget impossible without deep cuts previously unknown to the City. Outsourcing, while painful and to some unacceptable, provides a higher level of service to the community than does achieving savings simply by eliminating positions. With outsourcing, the work will get done. With simple layoffs without replacements from the private sector, there will be a failure in service delivery to the public.