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Smith: Charter gives Ott authority to withhold market raises

Tuesday, January 27, 2009 by Austin Monitor

In response to questions raised by a union representative and some members of the City Council, City Attorney David Smith has ruled that City Manager Marc Ott, who recently canceled market adjustment raises for some employees as a cost-saving measure, had the authority to do so.


Ott canceled the raises for about 1100 city employees, as well as instituting a hiring freeze and canceling pay for performance, in response to a drop in city sales taxes and possibly other revenue streams. Those cuts could save the city as much as $3 million, though Ott is ultimately looking for total cuts of at least $25 million.


Shortly after Ott announced the cuts, some argued that he was overstepping his authority and needed to get a budget amendment from the City Council to make such a move. In response, Ott asked Smith for a ruling.


In a memo dated Jan. 23, Smith told Ott he was on solid ground.


“The short answer is that you may refrain from making payments such as pay increases authorized in the approved budget if this is needed to keep the budget balanced.  No budget amendment is necessary,” Smith wrote. “Although the Local Government Code contains provisions relating to the budget process and the necessity for amending the budget in certain circumstances, it does not speak to this particular situation. This situation is controlled by the City Charter.”


Smith stipulated that his opinion applied to “only issues related to market adjustments, pay increases, and filling vacancies,” and did not apply to payments required a law.


Jack Kirfman with the American Federation of State, County and Municipal Employees, one of those who felt Ott had overstepped his bounds, said just because he could make the cuts didn’t make them a good idea.


“That doesn’t mean they can’t persuade him that some cuts are better than others,” Kirfman said Monday. “This announcement opens the door for them (the City Council) to say ‘We prefer you do otherwise.’”


In announcing the cuts to city employees, Ott wrote in a memo, “(G)iven the current economic conditions, most organizations are not increasing salaries, while many others are even decreasing wages across the board or eliminating positions entirely. Therefore, due to our continuing financial pressures and taking into account the changing ‘market,’ I feel that we must postpone this initiative.”


The hiring freeze and market raise decisions affect all departments except for uniformed fire, police and EMS and 911 call takers. The police and EMS unions have a contract with the city that is not affected by such decisions. The firefighters do not currently have a contract.


According to figures provided by the city, those employees not seeing expected market increases includes: 118 at Solid Waste Services, 96 at Public Works, 197 at the Austin Water Utility, 65 at Austin Energy, 40 in the Aviation Department and 130 at the Parks and Recreation Department.


City Chief Financial Officer Leslie Browder said the city is saving about $900,000 as a result of not implementing the raises this year.

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