Oxnard Approves Profit-Sharing Plan : Finances: Based on performance, the new approach in certain city departments is expected to reduce operating costs.

In another move to mimic the private sector, the Oxnard City Council on Tuesday unanimously approved a performance-based profit-sharing plan for selected city departments.

The program is intended to save cash-strapped Oxnard money by encouraging city workers to be innovative and reduce the operating costs of their departments while maintaining a high level of services, City Manager Tom Frutchey said.

“Every employee should be rewarded for his creativity and dedication,” said Frutchey of the concept. “People get the mistaken impression that it’s everyone looking out for themselves, but this is about people working together.”

The plan, set to begin next month, will be tried out on Oxnard’s equipment maintenance, parks and facilities, engineering, and planning departments, and possibly one or two other divisions.

Each department will be given a list of goals to complete every three months, and a detailed budget. Employees can meet the prescribed objectives however they see fit.

If at the end of a quarter a department has met its goals and come in under budget, half the surplus money will be distributed among its workers. The other half will go back into Oxnard’s coffers.

But if a department exceeds its quarterly budget, the money will be taken out of its budget for the next quarter, putting more pressure on workers to perform.

Employee theft, accidents, unmet goals and shoddy work would also result in deductions.

“There are objective standards that are laid out,” Frutchey said. “Any department that isn’t doing its job right can be fined.”

The program was developed by the city of Pittsburg, Calif., and has been working successfully there for eight years, Frutchey said. Pittsburg employees each have made up to $6,000 annually by cutting department budgets, he added.

Michael Henderson, Oxnard’s parks and facilities superintendent, said he looks forward to beginning the program in his 61-person department.

“I think it gives our full-time employees the opportunity to put their ingenuity to work,” he said. “If they take this idea and put it to use, they won’t have to worry about the city contracting out for services they provide, and laying people off. They will be as competitive as anyone else.”

The plan has to be approved by the two unions that represent Oxnard city workers, the Service Employees International Union, and the International Union of Operating Engineers.

The Service Employees International Union, which represents white-collar workers, could not be reached for comment Tuesday.

Archie Soliz, chief steward for the International Union of Operating Engineers, said the 280 blue-collar workers he represents support the plan.

“As far as the (Service Employees Union) is concerned, this isn’t about saving money,” said Soliz. “It’s about saving jobs.”

Frutchey also said the program would help prevent layoffs and the erosion of public services.

The City Council privatized Oxnard’s Economic Development Department in November in an effort to cut costs. The city is undergoing a sweeping reorganization to downsize city departments.

Councilman Andres Herrera said the plan approved Tuesday empowers employees by giving them more control over their work.

“I think the issue is that they have ownership of their own services,” Herrera said. “They are the masters of the environment in which they work, and they can do their work however they want.”

But Councilman Michael Plisky said that although he supported the plan on a trial basis, he believes it is unnecessary for those who believe in basic work ethics.

“I’m skeptical of the approach,” Plisky said. “If these people can’t do the job right without incentives, I’m sure we can find someone who will do it well. There are a lot of unemployed people in this state.”