St. Charles proposes sweeping pay freezes for city workers

Program cuts, a wage freeze and a voluntary retirement incentive are the key parts of a budget pitched by St. Charles staff Monday with hopes of avoiding layoffs or creating new taxes.

Salaries are the city's biggest cost. The plan to freeze the wages of every city employee represents the largest potential cost savings moving forward. All city unions must agree to the freeze or face potential layoffs. Currently employees, except police, would receive contracted pay increases of up to 3.75 percent. The police contract will expire before the new budget takes effect May 1. Their pay increases have yet to be negotiated.

City Administrator Brian Townsend said the wage freeze should have little impact on employees if they agree to it.

"The cost of living has not gone up," Townsend said. He pointed to a Consumer Price Index increase projected at only 0.1 percent. "There's really no basis or rationale for the (salary) increases other than what's in their contract."

Without the pay freeze, layoffs, unpaid days off or transforming full-time positions into part-time positions are all likely scenarios, Townsend said. Townsend's salary would also be frozen.

The wage freeze comes on top of other cutbacks. Vacant positions will not be filled. No summer interns will be hired. Nonemergency overtime will be trimmed. Nearly 60 city programs and projects will be slashed or suspended to save about $4.6 million. Those include less funding for the Convention and Visitors Bureau, fewer street repairs, cutting back on holiday decorations, having brush pickup only once a month and foregoing the replacement of city vehicles for a year.

About 50 eligible city employees were also asked to consider a voluntary retirement. Seventeen of those employees have expressed an interest in the city's offer in trade for severance pay and extended health insurance benefits.

Elected officials will be told there are three alternatives for every program cut or expense reduction they don't agree with: Spend down even more of the city's reserves, further reduce staff or wages, or find with a new income sources.

Staff presented a few options for new income. The largest potential income source is the creation of a new alcoholic beverage tax of 1 percent. The tax would be imposed on any drink served at a bar or restaurant and all packaged alcohol bought in a store. It could net more than $450,000 for the city. The second idea is a 1 percent increase to the hotel/motel tax. That would net more than $410,000. There is also an idea for a new entertainment/amusement tax of 1 percent on movie and performance tickets, bowling and billiards. That could net about $50,000.

Also included in the budget is an increase to the electric, water and sewer fund rates. The increases will result in the average resident paying about $56 more a year for those services.