The coronavirus effect on the economy is causing the City of Portland to find $100-million dollars in cuts.
Chief Administrative Officer Tom Rinehart sent the following letter to city employees:
I know that you are worried about what the global coronavirus crisis means for the City of Portland’s financial future, and how that will impact your own job security and financial health. As each day seems to bring more bad news for our national and local economy, it is natural to worry: What happens if I lose my job? How do I take care of myself and my family? When will this all be over?
In 2009, I knew many people deeply affected by the recession: friends who lost jobs that gave them both a livelihood and a purpose. Recent college graduates who struggled to find their first jobs. Neighbors who fell behind on mortgage payments. While that was a painful time for many, initial forecasts indicate that the City as an organization will face a revenue drop worse than anything we saw during the last recession. We estimate a reduction of up to $100 million, or possibly more, in general fund resources for the fiscal year that will begin July 1. The impacts are far ranging, including everything from tourism tax to parking meter revenue.
To save as many jobs as possible and recover as quickly as possible, we are asking all employees to make sacrifices that help us address the anticipated shortfall. That commitment starts with Mayor Wheeler, who has eliminated his own salary for the rest of this calendar year, except for required healthcare deductions. With the Mayor’s direction, we have started negotiations with our labor partners and decided on some immediate steps for non-represented employees:
· Effective July 1, 2020, no cost-of-living raises will be awarded to non-represented employees until further notice.
· Effective today, all merit increases will be frozen for non-represented employees. Employees with anniversary dates on or before April 10, 2020, are still eligible to receive merit increases as their performance evaluations are processed. Employees with anniversary dates between April 11 and June 30, 2020, will still receive performance evaluations from their managers. Their merit increases will be suspended until the City determines it can process this award. Employees with anniversary dates after July 1, 2020, should not expect to receive a merit award during the 2020-2021 fiscal year.
· All non-represented employees will be required to take 10 days of unpaid leave, known as furlough, between April 30 and Oct. 7, 2020. Bureaus will have flexibility in determining how each person meets this requirement. Options include taking one furlough day each pay period, taking two days per pay period or taking one week at a time. It is essential that employees do not perform work on the days they take furlough. I want to reassure everybody that your healthcare coverage will continue as usual while you take furlough days. We know there will be many questions about the details. Over the coming week, our Human Resources team will release guidelines and work with bureau directors to make this process as smooth as possible. Please stay tuned for an update in my daily email, and send immediate questions to BHRcommunications@portlandoregon.gov or talk to your bureau’s Human Resources business partner.
While these changes are specific to non-represented employees, who make up a little more than a quarter of the City’s benefits-eligible workforce, we are discussing the same strategies – including pay freezes and furloughs – with our labor partners. So far, we are finding common ground and a shared commitment to saving jobs and restoring the City’s financial well-being as quickly as possible. Our goal is to reach agreement about these approaches before Mayor Wheeler’s budget is released at the end of this month.
These cost-saving measures are difficult news with negative consequences for many people. I know the Mayor and the entire Council will do all they can to minimize the impact on both employees and city services, but we cannot wait to reduce costs and prepare for the sharp drop in revenue we face. Collectively, these initial actions for non-represented employees are expected to save more than $19 million and make a significant difference in addressing the budget shortfall. Please know that the Mayor, Council and Bureau Directors value all employees, not only as public servants but as people. During times of crisis like this one, we have to face our challenges honestly and directly by making necessary sacrifices for the greater good of all Portlanders. We are making these difficult decisions now to keep dedicated public servants employed, providing core services our residents depend on every day.
I want to close by asking you to continue taking care of your colleagues, families, friends – and yourselves. This hardship comes at a cost to your financial health, which I know can impact physical, mental and emotional health as well. Please reach out and ask for help, and find whatever moments of community and mutual support you can during this time. We all need it.
We’re in this together.