First deal with excessive labor costs

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On April 15, Dan Karleskint, a member of the Citizens Financial Task Force and a proponent of the Utility Tax, provided an interesting overview of the cost efficiencies to be obtained through Process Flow Analysis in his letter (April 15 News Messenger, page A4, “Creating revenue in the city is a real solution) on the merits of creating revenue. In the article, he argues the city has done a good job of removing the “fluff.” And he suggests there may be nothing more to be done to further reduce service costs. Strictly speaking, from a “process perspective,” he may be right. But there is more to the “cost of operations” than process costs. There are also the “input costs.” These costs, referred to by economists as “factors of production” include land, labor and the cost of capital. Lincoln’s General Fund problem, the impetus behind the utility tax, is not directly impacted by the cost of land or capital. The General Fund, as Mr. Karleskint argues, is almost entirely comprised of the cost of “labor” for police, fire, library and recreational services. As a member of TEAM Lincoln, a group of citizens focused on the general health and welfare of the city, I contend our citywide labor costs are excessive. Five executive managers receive yearly salary and benefits valued at more than $1 million. Twenty-five middle managers receive in excess of $150,000. All 200-plus employees “automatically” receive both cost of living adjustments of 2.5 percent and merit increases of 2.75 to 5 percent. The city pays 100 percent medical, reimburses 100 percent California SDI, and in addition to the “Employer” Pension expense, the city also pays 71 percent of the “Employee’s” Pension contribution”. As a consequence, the city today spends nearly $20 million in salary and benefits on 200 people – that’s $100,000 per city employee! I ask each Lincoln citizen, do these labor costs seem reasonable to you? Kirk Lubbes, Lincoln