City Hall
Sweeping City Layoffs Now on "Pause"
Mayor Mike McGinn sent out an email (and video message) to city employees today asking city department heads to "pause" on the sweeping mandate he announced when he took office earlier this month to layoff 200 senior-level positions.
McGinn's spokesman Mark Matassa confirms that the mayor is adjusting the process, noting "the high degree of concern and low morale" the original sweeping mandate caused among city staffers.
Matassa says Mayor McGinn "still believes" there was huge growth in upper level positions during the Nickels years and there need to be cuts.
(When McGinn first made the announcement on January 4, he pointed out that the city had 639 senior level employees eight years ago, but the number had grown to 951 today, an increase of 49 percent—while the overall city workforce increased only 2 percent during the same time period.)
However, rather than going ahead with layoffs now, McGinn wants the departments to use the process of identifying the staffing cuts and merge those details into the larger mid-year budget process—reevaluating what needs to be cut in the larger context of the department's work.
Matassa adds that the $40 million budget shortfall may get worse with preliminary predictions puttig the hole at $50 million.
Another reason to adjust the sweeping staff cuts, Matassa explained, is that "bumping rights" (that is, who got promoted when and into what position) blurs the lines between actual people and positions.
"Its not so simple," Matassa said, to just yank 200 positions, "when you get into the nitty gritty. There are unintended consequences."
Here's the key part of McGinn's email:
The full email is below the jump. It includes a link to the video address that Mayor McGinn also sent to city employees where he says he is "recalibrating" the senior level cuts.
From: McGinn, Mike
Sent: Saturday, January 30, 2010 11:55 AM
To: McGinn, Mike
Subject: An Update on the Budget and Senior-Level Position Review
Dear Colleagues,
I am writing today to provide you with an update on the status of the City’s budget and the senior-level position review exercise that we embarked on the day I took office.
Budget Update
When I was running for Mayor it was clear that the City of Seattle, like many jurisdictions across the country, was suffering from the budgetary impacts of the most severe economic downturn since the Great Depression. With this concern in mind, I asked my City Budget Office to do an early assessment of the City’s financial position. This preliminary review is complete and the news is not good. While year-end books on 2009 have not yet closed, the data indicates that 2009 revenues – particularly related to sales tax and B&O tax collections – are falling several million dollars short of projections. These trends also raise concern about the health of these same revenues for 2010. While still too early to make final decisions, the data available to date raises the specter of the need for mid-year reductions for 2010. This preliminary review also suggests that the City’s General Fund is facing a $50 million deficit for 2011. This City Budget office is closely monitoring the situation and will be in a position to provide additional forecasts once the books on 2009 close.
In addition to trouble in the General Fund, many other City funds are also suffering from the impacts of the weak economy. The Water and Solid Waste funds have seen declines in their customer bases as an increased number of business establishments have closed. Seattle City Light addressed a $90 million shortfall in wholesale power revenues in 2009 due to falling energy prices. For 2010, the effects of El Nino and the corresponding low water levels are forecasted to reduce wholesale power revenues by over $25 million. The Department of Planning and Development has seen permit revenues decline by $16 million since 2007 as a result of a significant downturn construction activity.
The economic circumstances and the impact they are having on our budgets make it clear that we must be vigilant in our review and oversight of the budget. I will be providing periodic updates on the City’s financial situation and more specific plans to address these shortfalls in the coming weeks and months.
Senior-Level Position Review
The day I took the oath of office, we initiated a review of senior-level positions in City government. This exercise grew out of concerns I raised when I was running for Mayor about the growth in the number of senior-level positions in City government since 2002. In the face of our budget challenges it is essential that we review all City functions to determine how to best align those functions with our available resources. Today, I am writing to announce that while I remain committed to this review, we are going to be re-calibrating how the process unfolds.
I am still asking departments to complete the functional priorities exercise and to provide an inventory of all senior-level positions. This information will provide a valuable foundation as we contemplate some very difficult budget decisions in the months ahead.
With this in mind, I have asked department directors to pause work on phase II of the senior-level position review exercise. As originally designed, in this phase departments were to develop position reduction proposals to meet their assigned target levels. Knowing that we will have to re-tool our operations in the face of upcoming budget reductions, I have now asked departments to integrate plans to reduce the number of senior-level positions into larger exercises around meeting potential mid-year reductions and in developing the 2011 budget. This will also allow us time to review senior-level positions in the context of Council’s span of control Statement of Legislative Intent (SLI), which is due to the Council on June 30, 2010. This will allow for a more deliberative review of our staffing levels in the context of changes that will be necessary in the face of our serious financial challenges.
In the face of these financial challenges, I remain committed to making the operational changes necessary to preserve as many direct services as possible. I appreciate the dedication of City employees as we embark on the challenges that lie ahead.
http://www.seattlechannel.org/videos/video.asp?file=1&ID=4470
Yours in service,
Mayor Mike McGinn
McGinn's spokesman Mark Matassa confirms that the mayor is adjusting the process, noting "the high degree of concern and low morale" the original sweeping mandate caused among city staffers.
Matassa says Mayor McGinn "still believes" there was huge growth in upper level positions during the Nickels years and there need to be cuts.
(When McGinn first made the announcement on January 4, he pointed out that the city had 639 senior level employees eight years ago, but the number had grown to 951 today, an increase of 49 percent—while the overall city workforce increased only 2 percent during the same time period.)
However, rather than going ahead with layoffs now, McGinn wants the departments to use the process of identifying the staffing cuts and merge those details into the larger mid-year budget process—reevaluating what needs to be cut in the larger context of the department's work.
Matassa adds that the $40 million budget shortfall may get worse with preliminary predictions puttig the hole at $50 million.
Another reason to adjust the sweeping staff cuts, Matassa explained, is that "bumping rights" (that is, who got promoted when and into what position) blurs the lines between actual people and positions.
"Its not so simple," Matassa said, to just yank 200 positions, "when you get into the nitty gritty. There are unintended consequences."
Here's the key part of McGinn's email:
I have asked department directors to pause work on phase II of the senior-level position review exercise. As originally designed, in this phase departments were to develop position reduction proposals to meet their assigned target levels. Knowing that we will have to re-tool our operations in the face of upcoming budget reductions, I have now asked departments to integrate plans to reduce the number of senior-level positions into larger exercises around meeting potential mid-year reductions and in developing the 2011 budget. This will also allow us time to review senior-level positions in the context of Council’s span of control Statement of Legislative Intent (SLI), which is due to the Council on June 30, 2010. This will allow for a more deliberative review of our staffing levels in the context of changes that will be necessary in the face of our serious financial challenges.
The full email is below the jump. It includes a link to the video address that Mayor McGinn also sent to city employees where he says he is "recalibrating" the senior level cuts.
From: McGinn, Mike
Sent: Saturday, January 30, 2010 11:55 AM
To: McGinn, Mike
Subject: An Update on the Budget and Senior-Level Position Review
Dear Colleagues,
I am writing today to provide you with an update on the status of the City’s budget and the senior-level position review exercise that we embarked on the day I took office.
Budget Update
When I was running for Mayor it was clear that the City of Seattle, like many jurisdictions across the country, was suffering from the budgetary impacts of the most severe economic downturn since the Great Depression. With this concern in mind, I asked my City Budget Office to do an early assessment of the City’s financial position. This preliminary review is complete and the news is not good. While year-end books on 2009 have not yet closed, the data indicates that 2009 revenues – particularly related to sales tax and B&O tax collections – are falling several million dollars short of projections. These trends also raise concern about the health of these same revenues for 2010. While still too early to make final decisions, the data available to date raises the specter of the need for mid-year reductions for 2010. This preliminary review also suggests that the City’s General Fund is facing a $50 million deficit for 2011. This City Budget office is closely monitoring the situation and will be in a position to provide additional forecasts once the books on 2009 close.
In addition to trouble in the General Fund, many other City funds are also suffering from the impacts of the weak economy. The Water and Solid Waste funds have seen declines in their customer bases as an increased number of business establishments have closed. Seattle City Light addressed a $90 million shortfall in wholesale power revenues in 2009 due to falling energy prices. For 2010, the effects of El Nino and the corresponding low water levels are forecasted to reduce wholesale power revenues by over $25 million. The Department of Planning and Development has seen permit revenues decline by $16 million since 2007 as a result of a significant downturn construction activity.
The economic circumstances and the impact they are having on our budgets make it clear that we must be vigilant in our review and oversight of the budget. I will be providing periodic updates on the City’s financial situation and more specific plans to address these shortfalls in the coming weeks and months.
Senior-Level Position Review
The day I took the oath of office, we initiated a review of senior-level positions in City government. This exercise grew out of concerns I raised when I was running for Mayor about the growth in the number of senior-level positions in City government since 2002. In the face of our budget challenges it is essential that we review all City functions to determine how to best align those functions with our available resources. Today, I am writing to announce that while I remain committed to this review, we are going to be re-calibrating how the process unfolds.
I am still asking departments to complete the functional priorities exercise and to provide an inventory of all senior-level positions. This information will provide a valuable foundation as we contemplate some very difficult budget decisions in the months ahead.
With this in mind, I have asked department directors to pause work on phase II of the senior-level position review exercise. As originally designed, in this phase departments were to develop position reduction proposals to meet their assigned target levels. Knowing that we will have to re-tool our operations in the face of upcoming budget reductions, I have now asked departments to integrate plans to reduce the number of senior-level positions into larger exercises around meeting potential mid-year reductions and in developing the 2011 budget. This will also allow us time to review senior-level positions in the context of Council’s span of control Statement of Legislative Intent (SLI), which is due to the Council on June 30, 2010. This will allow for a more deliberative review of our staffing levels in the context of changes that will be necessary in the face of our serious financial challenges.
In the face of these financial challenges, I remain committed to making the operational changes necessary to preserve as many direct services as possible. I appreciate the dedication of City employees as we embark on the challenges that lie ahead.
http://www.seattlechannel.org/videos/video.asp?file=1&ID=4470
Yours in service,
Mayor Mike McGinn
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