City of Merced deep into talks on new contracts

Some Merced city public works employees are worried about their future.

More than 120 employees could have to take a few hundred dollars worth of cuts to benefits such as health care and each month, but some are asking why, since most benefits are funded through the city's enterprise fund, money generated from city-provided services such as sewer, water, storm drain and refuse.

The contracts for public works, police and fire personnel are up for renegotiation with the city. The contracts expired in December, according to Deneen Proctor, director of support services. Proctor said she couldn't comment on anything more, citing ongoing talks with the unions and public works association.

The city is looking for concessions in everybody's contract, according to Mike Conway, city spokesman.

Doug Dutcher, president of the Merced Association of City Employees, which represents public works employees, argued that the city's enterprise fund is fiscally sound and that employees' paychecks shouldn't be docked.

$8 million to $23 million is sitting among the water, sewer, refuse and other enterprise funds, he said.

"That's where the rub is, because we are fully funded for everything," Dutcher, a traffic signal technician, said.

Over the past three years the number of employees in the association has dropped from 160 to about 120. Workers haven't had a pay raise in that period, and the cost of their medical insurance has risen by 7 percent this year and 5 to 6 percent last year, Dutcher said.

Status quo will do for now

Dutcher said he understood what the city was asking of its employees, but the more it takes from them, the easier it could be for employees to find jobs elsewhere. Most of the employees have taken a substantial hit, he said.

"Just leave us where we're at," he said. "In better times we can negotiate something else."

Brad Grant, city finance officer, said that every five years, a rate study is done and rates are adjusted so that the cost of providing a service, such as water or sewer, is covered. Because of that there is no structural deficit in the enterprise funds, he said.

The driving force for concessions is the deficit in the city's general fund, he said. That fund accounts for most of the city's discretionary money.

The general fund's deficit is estimated at $2.3 million for the 2011-12 fiscal year, according to Grant.

"Concessions have to be made, and there is the need to treat all employees across the organization consistently and the same," Grant said.

Ben Murdock, a collections system maintenance worker, said the employees are making concessions in a department where the savings aren't necessary.

"We're making all these concessions to save money in a department that is fully funded, and the savings that are realized can't be used to help the police and fire," he said.

Enterprise fund money can't be used or transferred over to other funds such as the general fund.

Finding common ground

The city is also in negotiations with firefighters, the unrepresented management employees and police.

Chad Englert, president of the Merced Fire Fighters Local 1479 of the International Fire Fighters Association, said the union and the city are trying to reach a deal both sides can live with.

But he cited the Merced City Council's decision not to rezone the area near Mercy Medical Center on Monday night to commercial, which supporters said could have brought in revenue and jobs. After that vote, Englert said, the city is asking the employees for concessions to try to deal with a budget shortfall.

Detective Joe Deliman, president of the Merced Police Officers Association, said the union has a meeting with the city today and is in the early stage of discussing contracts.

Reporter Ameera Butt can be reached at (209) 385-2477 or abutt@mercedsunstar.com.