In the face of a $12 million budget shortfall, Hayward’s leaders are slashing their salaries.
The city council and executive staff announced on last week that they would take voluntary pay cuts and pause cost-of-living adjustments as a first step toward addressing the city’s unsustainable finances, which racked up more than $37 million in overtime this past fiscal year, according to the city’s payroll data obtained by Bay Area News Group.
While the savings from the pay cut are a drop in the bucket in addressing the city’s deficit, Salinas said the concessions are an act of good faith as officials prepare to renegotiate contracts with the city’s labor unions ahead of further budget cuts this fall.
“I’m proud of my colleagues, and I’m very proud of our executive team, who have stepped up again to take a pay cut to fight this budget deficit together,” said Hayward Mayor Mark Salinas. “We’re still not out of the woods. We still have serious decisions to make.”
Last year, Hayward officials made some significant miscalculations in the city’s budget — overestimating revenue, underestimating expenses and making a sizable purchase of a movie theater downtown that drained $31 million from the city’s reserves, according to city officials.
A primary source of the city’s burdensome expenses comes from more than $37 million in overtime pay. All of the top 25 overtime recipients for the city were public safety employees.
Public safety departments have mandatory minimum staffing levels that lead to overtime for employees, according to Hayward Marketing and Communications Officer Chuck Finnie.
When the council approved the city’s budget in June, officials knew it would have to be revised over the coming months to balance the city’s finances, Finnie said. The first step came last month when interim City Manager Jayanti Addleman announced last month that the city would freeze all hiring on unfilled staff positions and rein in expenses for employee training and consultants.
Council members took another step last week when they decided to cut their salaries and forego a cost-of-living increase amounts to a 6.5% salary reduction this year, and the city’s executive team, which includes most of the city’s department heads, agreed to a 4% salary reduction, according to a city press release.
In addition, Addleman signaled plans to hire an independent financial analyst to evaluate Hayward’s budget from the past year and scrutinize the budget forecasting process that led to the budget’s instability, according to a city press release.
A new budget is scheduled to be presented to the city council in November that includes revisions that cut down on the city’s expenses and reduce the strain on the city’s general fund. In the meantime, Salinas asked the public to be patient as he and the city’s leaders work to right the ship.
“We are all together trying to figure out how to balance higher demands on public services and balancing our budgets. I know it’s frustrating, I know people get upset,” Salinas said. “But we’re trying to get this done and we’re not going to stop until it’s balanced.”