Aren’t employee salaries and benefits a primary cause of the budget problem?
While employee-related expenses are a significant portion of the City’s General Fund, it is unfair to suggest it is one of the primary reasons for the budget problem. Approximately 70% of the City’s operating budget is made up of employee-related costs for salaries and benefits. This may seem like a large percentage, but it is important to keep in mind that the City is entirely a service organization. The City does not manufacture a product, it provides services i.e. public safety, recreation, maintenance and community development services, among others. The primary expense for service organizations is, of course, the cost of compensating employees. It is also important to note that 70% for employee-related costs is typical for municipalities and that the salaries and benefits the City pays its employees are lower than the average for similar communities in the North Bay. Although employee-related costs will rise marginally in future years, primarily due to increased retirement expense
