2nd Open Letter to Mayor Fischer - Labor Budget Explosion

Anthony Piagentini

abpiagentini@gmail.com

February 16, 2014

Mayor Greg Fischer

Metro Hall

4th Floor

527 W. Jefferson Street

Louisville, KY 40202

Dear Mayor Fischer,

This is the second letter detailing problems with the current Louisville fiscal budget which I believe, increases our long-term fiscal risk.  Last week, my letter was introductory and only focused on one smaller line item in the budget, Codes and Regulations.  My questions in that letter were rhetorical and I did not expect a response.  This week’s letter begins to tackle a far more serious issue of increasing city labor costs and I would like a response from your office to the questions detailed below.

In your 2012-2013 budget address, you said, 

“After 17 months, we’ve reduced the size of government by about 100 people, largely through attrition. This is a start, but I have asked Chief Financial Officer Steve Rowland to put together a team and develop a strategic plan for using attrition to help eliminate the structural budget imbalance.”

In your 2013-2014 budget address, you similarly stated,

“We’ll see a yearly savings of about $1 million through the attrition that happened this year, when we chose not to automatically refill vacated positions. This is part of a long term trend. When the city and county merged, we had approximately 6,400 employees. We are now at about 5,400.”

Mr. Mayor, if these statements above are true, how has the salaries for ‘bi-weekly permanent employees’ gone up by 25% in 2 years?  It has gone from $149 million to $ 188 million in a 2 year timeframe.  Further, ‘wages for hourly permanent employees’ has gone up by 31% in that same period moving from $31 million in 2011-2012 to $41 million in 2013-2014.  

According to the US Census Bureau, population growth from 2010-2012 was only 1.3%.  In my first letter, I mentioned that labor force growth is only up 1.6% in a similar timeframe.  This would mean the cities labor costs are outpacing population and labor growth by a multiple of 15 (that is the lowest ratio using permanent employee cost growth and 1.6% labor force growth - using other numbers would have yielded an even higher ratio).  Put another way, your labor budget is outpacing the growth of Louisville by 1500%.  

Your statements in your budget address and the reality of your budgets are not congruous.  I would like a detailed explanation of the discrepancy between your statements around cutting the city’s workforce and the incredible rise in labor costs over the same timeframe.  I would like your response to answer the following questions:

What was the cause of this growth?

Why is it so disproportionate to Louisville’s population and labor growth?

How will this not put us at long-term fiscal risk (e.g. additional healthcare, retirement costs)?

Are there any areas you actually cut in the budget to offset these short or long-term costs?

What is the return on this labor investment and what has been the outcome of this growth in costs?

I once again reiterate my frustration that no media organization even attempts to hold your administration accountable for these discrepancies.  Their lack of attention to this level of detail shows either their complete bias toward your administration or their abdication of their responsibility as journalists.  

Again, I respectfully ask for a detailed response to this letter including answers to the above questions.  

Sincerely yours,

Anthony Piagentini