Costa Mesa approves $3 million in pandemic-related furloughs, though some question process

To help balance a 2020-21 budget predominated by coronavirus-related revenue losses, the Costa Mesa City Council recently approved furloughs for city employees across all departments, amounting to $3 million in savings, after negotiating with union leaders.

Carol Molina, the city’s budget and purchasing manager, told council members in a special meeting Thursday night that all employee groups were asked to consider furloughs equating to about 5% of the workforce.

Departments were originally asked to consider 10% cuts, Molina clarified, before the city was made aware it was eligible for about $3 million in COVID-19 funding from county, state and federal agencies.

“With the anticipated receipt of the general fund backfill, we reduced that 10% request to 5%,� Molina said Thursday. “We have been in talks with the unions as early as May 4, and we’ve had multiple discussions with them to get to this point.�

The furloughs are just part of a multifaceted approach by city leaders to close a $24-million budget gap for 2020-21, the result of revenue losses sustained from the closure of businesses and city facilities that generated millions in taxes, fees and fines.

Council members approved earlier this month making $10.8 million in across-the-board departmental cuts and drawing down $10.2 million in reserve funds earmarked for disasters and economic recovery.

Furloughs were quickly negotiated with representatives from the city’s labor union, including the Costa Mesa Police and Fire & Rescue departments, as well as units representing nonunion employee groups.

As such, each labor unit has agreed to 104 hours of furloughed time, in addition to restrictions that would keep employees from cashing out their vacation balances throughout the fiscal year and temporary increases to vacation caps.

Some groups successfully negotiated city matches to employees’ retirement health savings plans and asked for contract reopeners in the years ahead that would consider base salary increases, should conditions approve.

Human Resources administrator Kasama Lee said the goal for the city going into talks was to secure the 5% furloughs in the new fiscal year, while keeping things flat in 2021-22 before considering possible modest contract increases in outlying years.

“Had we not been able to reach agreements with the groups, we would need to bring forth an additional $3 million in cuts, in addition to what was already cut, and that would include possible workforce reductions,� Lee told the council.

Council members largely praised staff for working so quickly on negotiating the cuts before the July 1 start of the new fiscal year.

“It’s really remarkable that these agreements have been negotiated at an arm’s length and in good faith, for the benefit of the community, to try and fill a hole in our budget under very difficult circumstances,� said Mayor Pro Tem John Stephens. “We never wanted to do this, but we’re all in this together.�

Council members Sandy Genis and Allan Mansoor objected to the fact that quickly reached agreements seeking immediate council approval seemed to violate city policy requiring transparency in labor negotiations and making accommodations for public review and input.

Policy 300-8 says proposals and counterproposals must be publicly available and that tentative agreements reached between negotiating parties be posted at least seven days before a vote by the council.

It also requires council members to report any communications they have had with representatives of employee groups regarding terms of the negotiations.

“I don’t actually have problems with the agreements themselves,� Genis said, “but I do have some concerns about the process.�

Mayor Katrina Foley defended staff and City Manager Lori Ann Farrell Harrison — who led negotiations but could neither post agreements with prior notice nor attend Thursday’s meeting due to a family emergency — for acting with urgency in an uncommon situation.

“We are in the middle of a pandemic. We are trying to balance the budget in an economic crisis of a kind that no one has ever heard of in more than 100 years,� Foley said. “This criticism of our staff not following policy — it’s just, frankly, offensive.�

Ultimately, the council voted 6-1 to approve and adopt side letters of agreement with its employee groups and resolutions necessary to grant the furloughs. Mansoor cast the lone dissenting vote.

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