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June 21, 2002
For More Information Contact:
Diane Gonzolas, Citizen Information Center, 441-7831
Jeff Stump, NAGE, 467-5830

City Union Agrees to Reduce Personnel Costs
NAGE joins Firefighters Association in agreeing to changes

Mayor Don Wesely and the President of the National Association of Government Employees (NAGE), Local R9-38, Jeff Stump, today announced that NAGE has agreed to work with the city to reduce personnel costs by nearly $818,000. In ratifying its three-year contract last night, NAGE members voted to delay a four-percent negotiated raise for 13 pay periods, saving about $447,300. In addition, the union voted to give up the city contributions to its Post Employment Health Plan (PEHP) for the coming fiscal year, a savings estimated at $370,500.

NAGE represents 475 full-time employees. The NAGE agreement allows the Mayor to propose a 2002-2003 budget, which includes no lay-offs of NAGE employees. The Mayor will release the proposed city budget June 24.

"NAGE was the first union to work with our office to control personnel costs," said Mayor Don Wesely. "The union leadership has been working with us since March, and our negotiations were very cooperative. I want to thank all the NAGE members for recognizing our difficult budget situation and doing what they could to help."

"We appreciate the opportunity to work with the city to save jobs," said NAGE President Jeff Stump. NAGE members include laborers, equipment operators, library assistants, account clerks and clerical support staff.

On June 13, the Lincoln Firefighters Association, Local 644 announced that it had agreed to give up the city contributions to PEHP and reduce overtime expenses. The city will also eliminate one vacant firefighter position. The total savings from that agreement is an estimated $414,000 in the next fiscal year.

The Mayor began talking with the unions in December 2001 about the $5.5 million budget gap for the 2002-2003 fiscal year and the impact it could have on personnel and services. Personnel costs account for about 71 percent of the city’s tax-supported budget. The five city unions represent about 93 percent of all city employees.

City employees have two opportunities for pay increases each year. At the beginning of the fiscal year, all city employees receive a comparability increase, which is about four percent for the bargaining units under contract in the next fiscal year. Under their union contracts, city employees are also eligible each year for merit pay increases. Those increases range from one to six percent or are determined according to their step plan.

The average total pay increase for city employees who are not at the top of their pay range has been eight percent. According to personnel records, more than 98 percent of eligible city employees receive merit pay increases.

In March Mayor Wesely asked the unions to consider a freeze on merit increases for one year, reducing the average city employee pay raise from eight percent to four percent. The reduced pay raise would have produced about $1.8 million in savings. The 65 percent of city employees who have not reached the top of their pay ranges would still have received the four-percent comparability increase, but no merit increase, which averages about four percent. The remaining 35 percent of city employees who have reached the top of their pay scales would have received half the four-percent comparability raise at the beginning of the fiscal year and the other half at the end of the fiscal year.

When the city unions requested other options, Mayor Wesely offered to work with each union separately on proposals to achieve the same $1.8 million total in savings as the Mayor’s original proposal. If agreements on compensation savings could not be reached with the unions, costs would be reduced through a reduction in personnel.

The city’s budget shortfall is the result of lower than projected sales tax revenues, which make up 43 percent of the tax-supported budget. As sales tax revenue slowed last year, Mayor Wesely imposed spending restrictions and held back about $5 million in authorized spending to ensure the city’s current budget remained balanced. Those measures included:

  • Putting on hold a majority of the current year Capital Improvement Program (CIP) projects that were to be funded from the city’s general fund. CIP projects slated for fiscal years 2002 through 2006 are to be moved back one year.
  • Eliminating discretionary travel for all employees. Exceptions are considered for necessary employee training and for travel in which there is no city expense.
  • Declaring a moratorium on the use of re-appropriated funds in August 2001 and then removing from department budgets 90 percent of the re-appropriations from the previous fiscal year.

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