Mesa offers voluntary severance to staff

The inevitable is nearing. Mesa is offering city employees a severance package in light of the tough economic situation that's expected to trigger job cuts soon, City Manager Chris Brady said Friday.

Employees opting for the package will get two weeks of pay. Additionally, they'll get one week of pay for every year they've been employed with the city. This will be capped at a maximum of 12 weeks.

All full-time employees as well as non-sworn and part-time employees who get benefits can exercise the option. Police and fire personnel are not included in this deal, Brady confirmed, although he said those departments are going to be affected by the cuts. Mesa employs more than 4,000 full- and part-time workers.

Those who choose to leave on their own by December's end will get the same offer as those who stand to get laid off. The reason for giving employees this option earlier is so those who might have other job offers can start thinking about accepting this package, Brady said.

Brady said Mesa doesn't have a set target for the number of employees it hopes will use this option. He said in talking to employees over the past several weeks, it was clear they understand that job cuts are bound to happen, even as Mesa, like other municipalities, deals with the worsening economic situation.

"People naturally didn't want to leave sooner than if they could get a severance package, so essentially we're saying if you leave between now and the end of the year, you'll get the same offer," Brady said. "It gives our employees more time to make their own decisions and plan their future in these tough times."

Brady added he's not sure if anyone would take advantage of this offer, unless they have another job lined up.

"They (employees) just wanted the option so that if they do have a job, they can take this offer and not miss another opportunity," Brady said.

Formal notifications to employees who may be on the list of layoffs are going to be sent as early as next week. Brady said there is going to be a "significant" reduction in the number of positions but could not specify until things are fleshed out.

Friday afternoon, several staffers blamed tumbling sales tax revenue collections for the city's critical situation, saying a property tax is a practical solution to keep the city's essentials like police, fire and community services such as parks and libraries running. Money for these operations comes from the city's General Fund, which is budgeted at $341 million for this fiscal year.

The severance package may not have too many takers, employees said, although they agreed it would help those who may have a job offer already. But for those who've worked for the city for more than 12 years, it doesn't make much sense to take the deal, they said. Overall, they said, the mood is dark. One employee teared up at the prospect of people losing their jobs. There is also a general feeling that upper-level management should have to take a hit too, along with the other departments, the employees said.

The job cut numbers floating within the city's grapevine range anywhere from 400 to 600. However, city officials have not confirmed a figure.

Brady has asked each department to come up with ways to cut costs and to come up with lower budget figures. Some departments have had to go back to the drawing board when the cuts shown weren't enough.

Some departments can expect a 50 to 60 percent reduction. The police department has to make 10 percent budget cuts. The fire department has already announced a $1 million cut. Public safety comprises 70 percent of the city's budget.

September's sales tax revenue figures are not available yet. Mesa's budgeted sales and use tax revenue for 2008-09 is $147.2 million. But total receipts for the fiscal year to date, between June and August, are nearly $33.5 million, down $4.5 million from the city's estimate for this period. The receipts for the same period last year were $38.7 million.

It's been estimated that sales tax revenue by this fiscal end could be down by about $40 million, but Brady said it's been hard to make projections, because of the unprecedented declines.

"We experienced a steep decline the past few months, but we don't know when it's flattening out," Brady said. "It's hard to say if it's a trend and how long it's going to last."

City staff is going to present Mesa's revenue numbers, the overall budget situation and plans to deal with the same, to the Mesa City Council Nov. 20.

Brady said it's been hard to go through this entire process, not just for those who would have to be let go, but those staying behind, because the city is planning to change the way many departments function to deal long term with "the new economy."

"We're going to be changing things the way we do, so that makes for a hard adjustment for some who are used to working one way," Brady said. "These are hard times and we have to think, what do we do? Do we continue the same services or do we adapt the best way we can?"