Fresh off an election victory, Phoenix Councilman Sal DiCiccio is laying out a plan to rein in employee costs, which have ballooned in recent years even as the city cut tens of millions of dollars from its budget.7 Labor Unions is 7 Labor Unions Too Many
Across all departments, the cost of estimated employee salary and benefits grew by $285 million, or 23 percent, between fiscal years 2006 and 2009. The number of full-time-equivalent employees in fiscal 2009 was 16,956, up 8 percent during that same period, though that figure fell below 2007 levels for the current fiscal year which began July 1. Employee costs were not available for this fiscal year.
"When I saw these numbers I was shocked, and the public is going to be shocked, too," DiCiccio said during an interview in his City Hall office. "We don't have a budget problem. We have an expense problem. The taxpayers have been paying more and getting less."
DiCiccio, who defeated Dana Marie Kennedy in a run-off election this month, said Phoenix can't afford to continue down that path. He is proposing a three-pronged approach to restructure and curb employee costs:
� Outsource or privatize more city jobs and functions, such as automobile repairs, custodial work, parks maintenance and cleanup, human resources and printing. "A brake job is a brake job," said Hal DeKeyser, DiCiccio's chief of staff.
� Cut layers of bureaucracy for certain business processes and cross-train remaining employees to perform multiple tasks. For example, if it takes three employees to process a building permit, eliminate two of them and train the third to do the others' jobs.
� "Redeploy" or shift resources and funding to police officers, firefighters and other front-line employees at City Hall.
While lacking specific details and numbers, DiCiccio's plan comes just as Phoenix's seven labor unions are preparing to begin negotiations with the city for new two-year contracts.
Where DiCiccio misses the boat (and badly) is in regards to police and fire. They are a huge portion of the budget and neither should be sacred cows.
Getting rid of the police union would be the hardest of the lot but the rest should easily be doable. All it takes is a bit of resolve and willingness to send the unions packing by privatizing services.
To achieve maximum benefit, the bidding process for privatized services must be open, competitive, and non-politicized. That is all it takes.
The mayor and council members need to pay hardball with the unions and especially with the police and fire unions before they bankrupt the city (assuming of course Phoenix is not already bankrupt from pension promises that can never be paid).
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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