Council gets early start on this year's budget
It's only January, but the City Council and interested residents spent nearly five hours in a public meeting Tuesday night wrestling with how to fix an estimated $5 million general fund deficit in 2010-11.
The general consensus during the meeting, one of several meant to prepare everyone for June's budget decision, seemed to be that "incremental" and "nickel and dime" cuts to city services would no longer suffice following the cuts already made last year to fill a similar deficit.
This year, many agreed, major, consequential changes will have to be made. These might include having the county run the city's Fire Department and library, which council members seemed to believe would reduce costs.
Finance director Patty Kong estimates that without a way to reduce growing costs, the gap between city general fund revenues and expenditures would increase to $7 million and $9 million in 2011-12 and 2012-13, respectively, even if the city fixes the deficit this year without reserves. The biggest reason for the budget gap is growing employee compensation costs, officials said.
Council member Ronit Bryant said that if voters are ever expected to support a tax measure to help fund services, the city would have to have "its own house in order," which would likely mean major cuts to employee compensation.
City staff proposed filling $1 million of the gap with cuts to employee compensation. Another $3.5 million to $4 million could come from cuts to city services, which council members took to mean employee layoffs. Another $500,000 to $1 million could come from new revenue sources, such as recreation fees. Specific proposals are expected in the coming months.
The city's Senior Center was cited as an example of how fees could be generated. By having one entrance and exit, the city could start collecting fees, especially for non-residents, or start charging for parking or rental of the building on weekends.
Council member Mike Kasperzak and others said residents would likely balk at paying more fees for less services in a recession, while city employees get compensation increases. Council members Laura Macias and Margaret Abe-Koga continued to press the council to find ways to increase revenue, however, though most seemed to favor cutting services instead.
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