Board of Finance Finds Big Savings in Salary Cuts

When New Canaan's Chief Financial Officer, Gary Conrad, issued budget guidelines to the town department heads in December, he told them to assume 2 percent wage increases across the board. The Board of Selectmen passed the 2010-2011 town budget proposal on to the Board of Finance with that assumption intact. But about a third of the $853,148 in proposed expenditures the Board of Finance subsequently cut— $260,800—came from zeroing out those raises. That's the biggest chunk of cuts the board achieved outside the net $276,530 they requested from the Board of Education. Another 15 percent came from eliminating several department's requests for additional personnel.

Under the revised budget proposal, $98,262 in raises is sloughed from non-negotiable non-union salary lines; another $162,618 is expected to come from union givebacks during the upcoming bargaining sessions.

"The difficulty here is that we have to set a budget before the union negotiations are complete. The way we've decided to do that is to have a salary line that's neutral to last year," said Town Council Chairman Mark DeWaele.

The council, which can only subtract from and not add to the proposal, casts the final vote on the budget April 14.

"The selectmen, the Board of Finance, the Town Council... are on board with the budget as it's written," DeWaele said, suggesting that the council would make no notable changes before the vote.

First Selectman Jeb Walker, who pitched cutting the 2 percent raises, says it was, "a pretty easy decision."

"Whatever the [union wage and benefit] increase turns out to be," assuming there is one once the contracts are settled, Walker said, "we have plenty of money in the contingency part of our budget to deal with it... We're not going to settle for a pay increase under any circumstance that breaks the budget."

Last year, in the midst of economic crisis, the town government appealed to the police, fire, and public works unions for mid-contract concessions, but got little positive response (a Fire Department contract amendment worth about $100,000 in savings was never ratified by Town Council). So, to compensate for revenue shortfalls, four full-time positions were cut—one each in the Parking, Recreation, Building, and Inland Wetlands Departments.

All three town employee contracts, which were agreed upon three years ago when the economy was brighter, are up July 1 (the teachers contract has already been settled).

"We're definitely going [into collective bargaining] looking for givebacks in regard to healthcare—major changes in health care, pensions, and then some other changes that will add up," said Human Resources Director Cheryl Jones.

Jones said the union members are aware that the 3 and 4 percent increases in wage and benefits of recent years are a thing of the past, and she said getting to the equivalent of zero raises, and avoiding layoffs, under new contracts is, "doable".

"The employees that I see everyday know that we're not in a good economy," Jones said. "In this economy anything is realistic... If we look at the towns around us we are seeing them come in with zeros, increases in copays, increases in premiums."

If the negotiations, which begin with the public works union in two weeks, don't yield concessions equivalent to zero salary increases, CFO Gary Conrad says the Board of Finance could make a special appropriation from the general fund to fill the gap or pull back elsewhere to stay with in the bottom line that's passed by the Town Council.

"Just like they did when the economy went south—cut capital, non-essential services," Conrad said. "Worse come to worse, you lay people off."

First Selectman Jeb Walker said he was "willing to test" the unions' resistance to belt-tightening.

The Board of Finance already trimmed about $120,000 in personnel requests from the selectmen's proposed town budget: they cut the requested part-time allocation for the Town Clerk's Office by $12,500, $27,935 from the Parking Authority's proposal by converting a request for a full-time position to part-time, and they eliminated a request from the Human Resources Department for $15,100 worth of part-time help and another request from the Parks Department for a full-time Fields Supervisor worth $65,000. (The Board of Selectmen had already reduced the Fire Marshal's part-time salaries line by $23,000).

The board also shrank both the placeholders for firefighter callbacks and the training salaries line in the Fire Department's budget from $35,000 to $25,000.

All the cuts to raises, salaries and personnel netted an additional $48,440 worth of adjustments to forecasted insurance and benefits costs.