City Council Gets Unsavory Taste Of Budget Options

As bleak fiscal conditions continue, city staff and council members reminded residents Tuesday that jobs and some cherished programs remain in peril. Despite having layed off 11 employees earlier this month, more layoffs and cuts in recreation and other programs got a public airing at the city council meeting.

City Manager Belinda Espinosa said there is a $467,000 hole in the budget for the remainder of the fiscal year, which ends June 30. That is projected to almost double in the next fiscal year. So, Espinosa presented the council with a menu for proposed cuts with items that are not particularly appetizing, after giving a description of current income and expenses.

"Right now our assessed valuations continue to decline," Espinosa said. "As our assessed valuations reduce, which is a good thing for you because then that  means you pay less taxes,  but it's a bad thing for us because we rely on those taxes to deliver services and programs for the public."

On top of current woes, it probably will get worse.

"We already have an indication that this last quarter (sales tax revenue) could be $160,000 less than what were expecting. What that means is that there's another one and a half employees right there."

The city has been postponing payments to vendors, in the range from $1.6 to $4 million.

"Right now the general fund has no reserve funds in order to provide cash flow," Espinosa said. "In other words there's zero money in our savings account in the general fund."

The city's primary revenue sources, sales and property taxes, have shrunk considerably during the last two years of the weak economy and re-assessments of property values, which have fallen. Despite previous cuts and layoffs, it's still a struggle.

"Every time we think we have the numbers down we get hit with something else," said Mayor Roy Swearingen.

Under the plan presented Tuesday, residents could see reduced counter hours for the building department and the closure of the Swim Center and School of Performing Arts.

"None of these programs do we want to go away but something has to change," Espinosa said. "We have to look at things that are not cost recoverable."

Another string of layoffs appear certain.

"We want to save jobs," said Council member Pete Murray. "(But) the idea is to share the pain a little bit. It's really the community stopping and saying, 'what do we want and what are we willing to do to get that?' We have to help ourselves. We're a little city that doesn't have any revenue. What you're used to is kind of going by the wayside. I've been through a couple of these cycles, but none as bad as this."

Council member Tim Banuelos encouraged residents to bring ideas about volunteer efforts or other solutions that don't cost money to help save services like the swimming pool.

"Sometimes the things we need to come up with is not necessarily a money thing but it's an effort thing," Banuelos said. "We need help to figure this out. Each group will come up and say 'you've got to have our thing" but somehow we've got to figure out how to pay for all this stuff. We have to think beyond what we're used to."

Council member Debbie Long said scrutiny of everything is in order. "There's not one line item in this budget that's sacred to me," Long said. "I will be looking at calling for absolutely everything. I want to make sure that the programs we have are effective and most efficient in what they provide our community. What is sacred is being safe. Public safety is tantamount."

Cuts already adopted or proposed for this fiscal  year include:

• $175,000 per year through labor negotiations with employee unions;

• layoffs for 11 people for six months;

• lowered the operation hours of the cable TV station;

• leaving a vacant police officer position unfilled;

and

• shifting $200,000 of unallocated money from  facilities maintenance to the reserve fund.

Next fiscal year's savings would come from:

• continuing the employee layoffs ($384,000);
• eliminating a commander position in the police department ($205,725);
• sharing the job of fire chief with the Rodeo-Hercules Fire Protection District;
• obtaining a grant to fund a battalion chief in fire department ($140,000);
• continuing the cable TV cuts ($48,860);
• moving street sweeping and graffiti removal to in-house operations ($40,000);

and

• offering early retirement incentives to some employees (estimated $56,000).

The city's general fund also owes the city redevelopment agency a $2.5 million loan, and the city's eight percent utility users tax is due to expire in 2012. That tax collects about $2 million a year.