Aurora looking to cut personnel costs

Facing an $18 million budget deficit for 2011, the city of Aurora has announced plans to cut $8.4 million in spending by reducing employee compensation.

City officials say they will consider cutting pay, decreasing health insurance benefits, suspending annual cost of living adjustments and implementing furlough days.

"That alternative we think is much preferable to having to lay off a lot of employees," Mayor Tom Weisner said. "Layoffs are not a good alternative, but they are the alternative."

The city will try to negotiate compensation cuts with 10 unions representing 823 of its 955 employees, Weisner said. Pay cuts for nonunion employees will be decided without negotiations.

Last year, when the city faced a $19 million budget deficit, only the police management group, a union representing police commanders, lieutenants and sergeants, did not agree to lower salaries and other concessions, Carrie Anne Ergo, chief management officer, said.

Krista Heinke, president of American Federation of State, County and Municipal Employees Local 3298 and an accountant for the city, said the city has not yet asked to schedule a negotiating session.

"Within a week, we're going to reach out to say 'We'd like to sit down and talk with you about concessions,'" Ergo said Thursday.

AFSCME Local 3298 represents 174 Aurora employees and its current contract extends until Sept. 30, 2011, Heinke said.

"Nobody likes to give concessions, but things happen," Heinke said.

Before announcing the need for cuts, Aurora studied income from its three main revenue sources property, sales and income taxes between January and June, Brian Caputo, chief financial officer, said. The midyear financial review determined the city's budget shortfalls may be ongoing, he said.

"It's no longer necessarily a short-term phenomenon," Caputo said. "Things may be rebounding some, but there are mixed signals."

Caputo said he expects property tax and income tax revenue to decrease this year. But sales tax revenue has been increasing in 2010.

Aside from decreasing employee compensation, Aurora will suspend its tuition assistance program and eliminate health and wellness reimbursements. Ergo said the mayor's office is looking into other ways to generate revenue and cut spending.

"We can't continue to do business the way we've always done it," Caputo said. "It isn't going to work."