A judge recently ruled that the city of Guadalupe acted unlawfully when it suddenly announced in 2017 that employees would no longer be eligible for merit-based salary step increases, and the decision is expected to impact the city’s ongoing budget discussions.
In the proposed decision, which was filed by a California Public Employment Relations Board judge on May 24, the judge wrote that the city of Guadalupe violated California law when it failed to give employees salary increases as required by a contractual agreement between the city and its employees. Despite the city’s claims that the salary increase suspensions are necessary to improving its poor financial situation, the judge wrote that the city failed to adequately inform and bargain with union representatives before making the decision and ordered city staff to grant salary step increases to all deserving employees.
Although Guadalupe had weeks to appeal the decision, it did not. The appeal period has since expired, and the ruling is now final, according to the California Public Employment Relations Board. The board will now begin working to ensure that Guadalupe complies with the judge’s orders.
The decision was a big win for the employees who filed the unfair practices complaint against the city of Guadalupe in August 2017 with the help of Santa Barbara-based field representatives of Service Employees International Union (SEIU) Local 620, a workers union that represents several Guadalupe city employees.
Darryl Scheck, an SEIU field representative leading the case, said he and the employees he represents were happy with the judge’s decision.
“Our members have been waiting now for almost two years,” Scheck told the Sun. “It’s actually been over two years since they were informed that they weren’t going to get these step increases, so we’re just pleased that, in the end, the outcome was what we hoped for and what we anticipated.”
But Guadalupe is nearing the end of its budget discussions for fiscal years 2019-20 and 2020-21—the drafted budget was up for a vote at a Guadalupe City Council meeting on June 25—and the recent decision is expected to have an unanticipated impact on the city’s somewhat unstable general fund.
The city is still in the process of calculating the exact impacts. Interim City Administrator Robert Perrault said it’s expected to take the city’s current deficit of about $45,000 to roughly $60,000.
That’s not a huge setback, and Perrault said Guadalupe is still on course to have completely eliminated its deficit by the end of this fiscal year.
The city’s financial situation has been slowly improving since the city successfully passed several tax revenue raising measures a few years ago, which have increased the budget by about $200,000 each year. The city has also been prudent about spending, Perrault said, and is now receiving benefits from a few local development and construction projects.
Guadalupe expects to be in the black at the end of this fiscal year by roughly $153,500.
Still, Perrault said Guadalupe lacks the financial policies that would build up reserve funds, and because the city doesn’t have those funds, the recent unfair practices decision will have a tangible impact.
“Any time there is an issue like this, it will obviously adversely impact the city financially,” Perrault said, “maybe more so than cities with reserve funds.”
Proposed policies that would enable the city to build up reserve funds are included in the draft budget, Perrault said, and as of June 25, the Guadalupe City Council had been supportive of those measures.
—Kasey Bubnash
This article appears in Jun 27 – Jul 4, 2019.
