Tension is growing between mayor and city employees union

Sullivan had asked all unions representing city workers -- including police officers, firefighters, electricians and municipal employees -- to meet with his team. The administration talked with representatives from both the police and fire unions last week, suggesting ideas such as wage freezes, higher contributions to employee benefit programs and shorter work weeks in order to help avoid more drastic cuts or higher taxes for Anchorage property owners.

If that doesn't work, "then we'll have fewer personnel," Sullivan said Friday. "The ball's kind of in their court about which direction they want to go."

The Anchorage Municipal Employees Association was scheduled to meet with the administration for 30 minutes Oct. 27.

The premise of the meeting was "basically a political lie," wrote attorney Charles Dunnagan on behalf of AMEA, in its letter to Sullivan. The union represents about 550 employees, including lifeguards, nurses, clerks, engineers, accountants and scale-house workers.

"For our group, it's what everybody has been wanting to say but couldn't say," AMEA president Mark McKee said Sunday.

The union contends that Sullivan has under-taxed Anchorage and that the administration has manufactured a budget crisis. Union members have already given plenty of recent concessions, McKee said.

"Unlike you, municipal employees already know what sacrifice feels like. You're welcome," Dunnagan wrote.

The strident tone and personal nature of the letter crossed the line, Sullivan said. But what's more significant, he said, is that AMEA is wrong when it says the mayor's office is overstating any potential budget shortfall.

"Even if we taxed to the tax cap, we are still millions of dollars in deficit, so I don't know how anybody could say with a straight face that we don't have a budget gap," Sullivan said.

Sullivan's 2011 operating budget proposal, unveiled for the Assembly on Oct. 1, would eliminate 110 positions, including as many as 31 layoffs and 56 positions currently vacant. The remainder would be paid for by grants or capital project money.

The budget proposal also factors in a 1.6 percent property tax increase -- still under the tax cap -- and higher fees for some city services.

"If we tax to the tax cap, what we're saying to the public, which is in a recession, is that we're going to increase your taxes 7 to 8 percent because contracts were passed that are out of line with reality, and I'm not going to do that to the citizens of Anchorage," Sullivan said.

Sullivan has repeatedly blamed the administration of former Mayor Mark Begich for approving multi-year union contracts that he has said the city could not afford.

The cuts in Sullivan's 2011 operating budget do not preclude the possibility of more layoffs if unions are unwilling to make further concessions.

"It's a question of more expensive employees and fewer of them, or keeping the same number of employees but having some concessions that help out the budget," Sullivan said.

Without adding any new personnel, benefit and wage costs for municipal employees will increase 7 percent from 2010 to 2011, about $2.5 million, Sullivan said. That's an "incredible" increase, the mayor said.

Municipal employees are not the cause of the high payroll expenses, McKee countered. Part of the blame should go to executives at City Hall, he said.

"You always have to look at how many people you have at the top, and if the bottom keeps shrinking, you can't keep having that huge overhead of executives at that level," McKee said.

Further, Sullivan's unwillingness to tax to the city's voter-approved tax cap is related to the mayor's political ambitions, McKee said.

"If he doesn't do that, and he wants his political platform to be reducing the size of government, that's how you do it," McKee said. "The bottom line is if you and I, as a community, have said you can tax up to this rate, we should tax up to that rate."

Mayor Sullivan has called the budget gap a structural problem, perpetuated year after year by poor planning.

"It's not solved by saying, 'If you give up a dollar today, I'll pay it back to you tomorrow,' " Sullivan said. "It has to be permanent savings or else we're fighting this budget battle every single year."

The administration is committed to fixing that, Sullivan said.

"We've been trying to take as many of the challenging cuts up front in the first few years so that we can get the city back on track and not have to be doing this every single year," he said.

Where the mayor sees future risk in terms of dollars, the union worries that the city will find it more difficult to attract and retain qualified public employees.

"We regard this as the 'slow train wreck' form of government," Dunnagan wrote in the union's letter to Mayor Sullivan. "This is government by deferred maintenance. The damage is real but not immediately apparent. You can save money in the short run but in the long run it is both stupid and dangerous."

Find Casey Grove online at adn.com/contact/casey.grove or call him at 257-4589.