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Health & Fitness

Invest in the future

Employee Compensation in these challenging times.

 

Foster City continues to rank as the top choice for families searching for good schools and an excellent quality of life. The City was designed to provide a consistent quality of life that is manifested in its infrastructure, policies, governance structure, public safety, and City staff. The previous stewards of our City provided the current Council with a healthy capital reserve and prudent historical legacy in terms of policy. We as a City have continued to reinvest in the various aspects of the City that are crucial to the public’s expectation of deliverables. The question that remains is what areas do we need to invest in and to what degree to maintain the quality of life that our residents expect and how invested in by living in our City and raising their families?

The City has made a commitment to balance our budget and cure the structural deficit of years past. Towards that end, the Council has tasked staff to sharpen their pencils and make effective cuts that reduce the deficit but do not affect our quality of life. I believe that our staff has accepted the challenge and has provided us with reasonable alternatives that accomplish both objectives.

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One such case in point is our Capital Improvement Funds. The Council has created and supported the funding of capital reserves that fund the maintenance and replacement of infrastructure, vehicles, and equipment. These funds are long term and provide adequate dollars to maintain and replace structures like bridges, roads as well as remodeling and updating of City facilities. In this case staff recommended cutting the amount placed into these funds in order to reduce the deficit and because the amount would also be better in line with the projected future needs. In fact just recently the Council created an additional fund where we will place the proceeds from the sale of the PJCC property and the soon to be completed sale of the 15 acres site which will by home to the new senior development.

The hard fact is that a large portion of our budget is allocated to the salaries of staff; the staff that provides public safety and maintains our City’s Parks and infrastructure. Like most Cities, eighty percent of our budget is allocated for salaries.  These are the salaries of the individuals who provide the quality of life we often speak of.  Every year we as a City and community fund these salaries as part of our continued commitment to our residents and our community.  This is the cost of doing business as a City.

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We are a customer service business. Our City and staff provide and maintain the quality of life we have all come to enjoy. As such, should we as a City, build the maintenance cost into our budget just as we do in other areas? In the private sector, many companies work hard to develop entry level employees into experienced laden and valuable assets.  There is no doubt that employees become more valuable over time because they can experience and knowledge in a continual sense to the departments in which they work.

Foster City is a fantastic place to live and to work.  Our employees are loyal, dedicated and extremely diligent in their daily performance of their duties.  The City has a great legacy of providing opportunity for advancement within each department.  This allows talented and dedicated individuals to move up in the organization to the mutual benefit of both.

In these challenging times, the City is faced with the challenging question of employee compensation.  We will address this difficult question during this year’s budget process.  Foster City has historically been consistent and competitive with the wages paid to employees with our surrounding communities.  However we will once again re-examine our assumptions and whether or not there is a need to adjust our compensation matrix.

Each year the cost of living increases.  It is more expensive to purchase goods, to educate our children, and to buy homes.  In most commercial real estate leases, landlords attach this rising cost based upon the consumer price index.  Typically these increases range between 1% and 3%.  In the private sector many employees consider CPI and increase the cost of services accordingly and the salaries of their valuable employees. 

The hard fact is if an employee maintains the original salary they were hired at in an economy where expenses increase 1% to 3% per year, it is only a matter of time before they are making less money every year.  If over a period of 5 years, the CPI increases by 10% and the employee’s wages are worth 10% less in the market place.  While any analysis of this issue is more complex, the simple fact remains that if the cost of goods continue to escalate and salaries do not, it is only a matter time before this becomes a problem of retaining and attracting qualified staff.

Over the next few months, I along with my fellow council members will be addressing this serious issue.  We as a City must be responsible to residents we represent and to the community we serve. We must find way to both balance the budget and continue to fund our quality of life.  As part of our process we will be considering updating our fee schedules and business license tax.  In one cases, The business license fee schedule have not been updated since 1972.

The question that remains is whether or not we should consider building a budget that adjusts for anticipated increases based upon the CPI or other economic predictors.  Should we consider the various factors that affect employee salaries and retention and adjust our budget accordingly?  These will be lively and important discussions over the coming months.  I look forward to hearing from our residents about this important issue as we craft the upcoming budget.

Please feel free to share your thoughts with me at hperez@fostercity.org or call me at 650-468-3143. If you have time you can join me for a coffee on Fridays at 9:30am at the Foster City Coffee House in Edgewater Plaza.

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