Consultants urge vacancy allowances and health‑insurance review to trim personnel costs

PFM told council that personnel costs — salaries, benefits and headcount gains — are the largest single cost category and that some of the FTE growth since 2015 should be reviewed for value and necessity. "Personnel is the biggest cost category that you have," one consultant said, recommending a three‑tier framework for positions (keep, invest, cut) based on cost and demonstrated value.

Consultants also recommended including a vacancy‑savings allowance when building salary budgets (reflecting typical gaps when positions are unfilled) and exploring health‑insurance changes for nonbargaining employees to secure near‑term savings. They noted many union contracts contain reopener provisions or extend past 2027, so bargaining‑unit savings will require negotiation. The consultants showed data indicating prescription costs have grown about 15% recently and urged the city to review the broker's options for plan design and prescription management.

Councilors asked for department‑level detail and to see how proposed personnel changes translate into millage or service impacts; consultants said those specifics will appear in the final report.