City of Santa Monica grapples with economic impacts of COVID-19 outbreak
By Sam Catanzaro
As the union representing Santa Monica’s public workers say they were not informed of a plan to fire over 500 employees until Monday as part of “unprecedented” budgetary cuts, a petition circulating calls for the firing of the city manager who says he’s prepared to be a “scapegoat”.
During a closed-door session following Tuesday’s Santa Monica City Council meeting, sources say plans were discussed to fire over 500 Santa Monica public employees as the city grapples with the economic impacts of the COVID-19 outbreak.
According to the union Coalition of Santa Monica City Employees (CSMCE), the first information shared with bargaining unit presidents was at a meeting on Monday afternoon.
“Over the next two weeks, the City management team will finalize and then present to you plans that will have irreversible and draconian impacts. These plans have not been developed with the involvement of employees, the bargaining units or the Coalition leadership. The first information shared with the Bargaining Unit presidents was at a meeting on Monday afternoon and it was almost completely devoid of detail,” CSMCE wrote in a letter to council.
This comes after what CSMCE calls a “rushed and awkward” implementation this week of unpaid administrative leave for over 400 employees whose workplaces have been closed due to the COVID-10 outbreak.
“Most of those affected are among the City’s lower paid workforce and will suffer the greatest hardship. Nevertheless, that step will pale in comparison with what is yet to come if the City Manager convinces you to use an axe where a scalpel is needed,” CSMCE wrote.
While the city calls reports of these cuts “not accurate”, a former senior-level City of Santa Monica employee who wishes to remain anonymous told the Santa Monica Mirror that over 500 city workers face losing their jobs among other cuts.
According to the source, some departments will be combined and that all department assistant director positions will be eliminated while the Office of Sustainability and the Environment will be reduced to all but four staff members.
In addition, the source said that the Santa Monica Public Library system may be reduced to two branches.
Amidst these reports, a Change.org petition circulating calls for the firing of City Manager Rick Cole and Assistant City Manager Katie Lichtig.
“City department directors had fewer than 3 days over the Passover, Good Friday, and Easter holidays to prepare their list of services, programs, and city staff that would need to be cut. Only 3 days to decide to decimate programs, services, facilities, and amenities that are so valuable to our community,” reads the petition, which as of Wednesday had over 2,200 signatures.
While the petition was not specifically mentioned during Tuesday’s council meeting, Cole did mention that he is prepared to be the scapegoat for any cuts that may come down the line.
“If I have to be the scapegoat for this, the teller of bad news, I am prepared to do that because that is my job under the charter. That is what you hired me to do. And I have to be clear in this public setting that there will be extraordinary harsh choices that I won’t like, you won’t like, the community won’t like, the workforce won’t like, absent of dramatic state or federal bailout funds,” Cole said. “We will have to make choices that are unprecedented in their negative impact on everything we believe in.”
“If I have to be the scapegoat for this, the teller of bad news, I am prepared to do that because that is my job under the charter. That is what you hired me to do. And I have to be clear in this public setting that there will be extraordinary harsh choices that I won’t like, you won’t like, the community won’t like, the workforce won’t like, absent of dramatic state or federal bailout funds,”Santa Monica City Manager Rick Cole
The harsh choices are a result of the economic impact COVID-19 has had on Santa Monica, a city that relies heavily on retail, tourism, dining and entertainment. In 2018, the City brought in nearly $2 billion in revenue from the tourism industry, including $58 million in bed taxes. According to City Manager Rick Cole speaking at Tuesday’s meeting, Santa Monica’s hotel tax revenues have plummeted to near zero.
City staff projects that by June 30, 2020, the end of the fiscal year, the City will have a $72 million budget gap in the General Fund. Projected deficits for July 2020 through June 2021, show an additional shortfall of $154 million with similar impacts being felt in the City’s Enterprise Funds.
Cole, along with the City Attorney Lane Dilg, are taking a 20 percent pay cut, according to the City. According to Transparent California, Cole $462,172 made in pay and benefits in 2018 while Dilg made $381,687.
To help mitigate some of the economic impacts, on Tuesday City Council authorized City staff to implement a Voluntary Early Separation Incentive Program (VESIP) for eligible staff this week.
Under the program, staff with 10 or more years of service will receive $15,000 and 18 months of City-paid medical benefits if the leave the city. Staff members with a minimum of five years will get $10,000 and 18 months medical coverage. Original plans called for employees getting either $10,000 or $5,000 but under an amendment by Councilmember Ted Winterer, the amounts were raised in the hopes of attracting more people to voluntarily leave.
Council also directed the City Manager to return on or before May 5 with a proposed plan that restructures operations and balances the budget in response to the pandemic.
According to the City, restructuring City operations will focus on foundational programs, emergency response, and economic recovery from the impacts of the COVID-19 pandemic.
In their letter, CSMCE urged council to keep in mind the value of Santa Monica’s public workers when formulating the plan.
“Slow down, look at more options, and involve the City’s employees to come up with alternatives that will help push the City forward with the least damage possible. Your employees are your most valuable asset and they are willing and able to get creative to find better solutions,” CSMCE wrote.