Stearns Asks Unions to Discuss ‘Reduced Compensation’ to Save Jobs

A letter from Town Administrator Galen Stearns to the municipal employees’ respective unions will ask them to come to the bargaining table to discuss “reduced compensation” in order to preserve jobs.

The letter, dated Feb. 19, asks union representatives to “come to the table in March and quickly negotiate concessions in compensation that I can use to reduce cost in the FY 16 budget.”

Stearns reminded his recipients that the Town Council passed a resolution Dec. 16, 2014 directing him to reduce the Town portion of the tax rate by $2 per $1,000. Stearns wrote that employee compensation, including salaries and benefits, is two-thirds of the current FY 15 budget and that to reduce the tax rate by $2 per $1,000 would require cuts of approximately $6 million, “which would necessarily impact our workforce.”

Stearns estimated that the $6 million would be equivalent to as many as 49 positions that would need to be cut.

But Stearns added that the impact could be lessened by “working toward a common goal” of preserving jobs, which would include “negotiating a reduced rate of employee compensation.” He urged the union officials and members to “help me save jobs by reducing expenses.”

Derry Fire Department’s Local 4392 has responded by mailing a flier to all Derry households stating, “If you are satisfied with the services we provide and want to keep them, help us by…” The flyer continues by listing the department’s Facebook, Twitter and Web site information, plus the telephone numbers of all seven Town Councilors.

Human Resources Director Larry Budreau said, “Reduced compensation could mean a number of different things.”

Budreau declined to comment on the letter, saying it was a matter concerning the town leaders and union representatives.

He did state that five entities are working without a current contract:

• The Fire Officers’ union and the Firefighters union, both represented by IAFF (International Association of Fire Fighters) Local 4392;

• The Supervisory Staff union, represented by AFSCME (American Federation of State, County and Municipal Employees) Local 1801;

• The union of Professional, Administrative and Technical personnel, SEIU (Service Employees International Union) Local 1984; and

• The Police Supervisors;’ Union, also SEIU 1984.

Council Chairman Mark Osborne said he didn’t think Stearns’ request would have a negative effect on the un-negotiated contracts. “If these contracts have not been resolved by previous Councils, nor by this Council, that speaks more to the expectations of these groups,” Osborne said in a phone interview Monday.

Osborne added, “The contracts wouldn’t be outstanding that long without a reason.”

Osborne compared the Fire Department’s flier to “scare tactics” and said a campaign of scare tactics would follow, in order to get the Council to back down on its stance on taxes.

“Any time a municipality talks about cutting costs, it’s easier to scare people than look at what you can do to lower the costs,” Osborne said.

Osborne said the taxpayers have specifically asked this Council for a lower tax rate and there are several ways that could be accomplished. “We could look at how we do business, we could look at ‘personnel considerations’ (meaning layoffs), or we could look at managing future costs,” the latter of which is what Stearns is attempting to do, Osborne said.

“They can be as helpful as they want to be or as unhelpful,” Osborne said. “This effort is aimed at getting everyone to work as a team.”

Last fall the Council had asked Stearns to explore what reducing the tax rate by $2.50 per $1,000 would “look like,” and at that time he brought back a scenario of cutting $6.2 million from the budget, including two Finance employees, nine from Public Works, 16 policemen and 22 firefighters.

Stearns explained the similarity between the numbers in an e-mail in which he wrote, “The first review that I did was a quick look using last year’s numbers without taking into account any changes and/or cost increases.  When we run the numbers increasing the items such as veterans’ credit increases, projected insurance increases etc., the result is that for a $2 decrease without any other changes is approximately a $6 million decrease.”

The 2014 tax rate set by the Department of Revenue Administration in October is $29.42 per $1,000, down from $31.49 per $1,000 in 2013. The breakdown is $9.72, town; $16.11, local school; $2.44, state school; and $1.15, county.