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April 01, 2005

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Publication Date: Friday, April 01, 2005

City looks at budget cut City looks at budget cut (April 01, 2005)

Council discusses use of reserves to avoid layoffs

By Jon Wiener

Spiraling salaries, health care costs and pensions for public employees are driving the city's fourth consecutive year of budget cuts, the topic at Tuesday night's city council study session.

Personnel costs will increase nearly $3.5 million this year, constituting close to 80 percent of the city's budget. The increases are outpacing the first growth in sales tax revenues the city has seen in four years.

To make up the difference, the city staff is proposing to cut $750,000 or about 1 percent of the total budget, by eliminating seven staff positions (six are currently unfilled) and reducing the library purchasing budget. Other proposed cuts include a wildlife rescue program run through the police department.

"We gave some very generous contracts to police and fire, and now we're paying the price," said Council member Greg Perry. Perry, who once again criticized the role of public-safety unions in council elections, was among several council members to suggest reducing the staff at the North Bayshore fire station.

Some council members suggested the city dip into its reserves to keep the programs running.

"We have over $20 million set aside for various types of rainy days," said Council member Nick Galiotto. "The reserves have become the sacred cows."

Perry and Matt Pear, the two most fiscally conservative members of the council, cautioned against using reserves, arguing that the city should live within its means and maintain its AAA credit rating.

Mayor Matt Neely found little support for his suggestion that the council consider new taxes, such as a 9-1-1 access fee or charges to use the library. But he said he was pleased with the course of the discussion and the council's apparent willingness to tackle big ideas and not just fight over particular budget items.

Balancing this year's budget was easier than in years past, according to City Manager Kevin Duggan. But finding additional fat to trim gets progressively harder, he said, and the gap between revenues and costs is going to continue growing without continued cuts.

"We will be challenged to cover our ongoing future operating costs without revenue increases," Duggan told the council.

More than 60 positions, all unfilled, have been eliminated in the last four years. But this year may bring the first layoff over that time period. Previously, positions have been cut through a process of attrition, but a part-time assistant pro at the Shoreline Golf Course is slated for the chopping block.

The golf course is expected to lose about $371,000 this year, one year after the city raised prices. This news prompted council members to call for a reassessment of the citywide fee increases the council passed last June.

The next budget meeting, on capital projects planned for the next four years, is scheduled for April 19.

E-mail Jon Wiener at [email protected]

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