Bid to save police jobs fails Bid to save police jobs fails (May 06, 2005)

Council worried about looming retiree health costs

By Jon Wiener

Mayor Matt Neely and Vice Mayor Nick Galiotto found little support among fellow city council members Tuesday night for their proposal to use city reserves instead of eliminating vacant police jobs.

As a result, a staff proposal to cut a police assistant and community service officer positions -- as well as five positions, four of them vacant, in other departments -- will remain in the budget as discussions continue over how to meet a projected shortfall of $750,000.

Galiotto and Neely both advocated dipping into the city's $20 million-plus in what they called rainy-day funds to lessen the impact of a fourth straight year of budget cuts. It would be the first time since the dot-com crash that the city dipped into reserves to boost its general fund.

"This is not a sacred cow," said Galiotto, referring to one reserve fund established in the mid-1990s to protect the city against long-term economic decline. A former police captain, he reiterated his previous support for maintaining the force at full strength.

"I have a responsibility to the electorate to say service levels should not be cut unless they absolutely have to be cut," he said.

But four council members -- Mike Kasperzak, Tom Means, Matt Pear and Greg Perry -- all voiced opposition to the idea, saying that the city's reserves are simply smart policy.

"People are amazed we're in the position we are this year as a city," said Kasperzak, referring to the city's AAA credit rating and the fact that the city has not laid off a single employee since the crash. Kasperzak said the city is in that position "because we have managed ourselves so well and so judiciously."

The reserves have continued to grow in recent years as the city has managed to come in under budget at the end of the fiscal cycle. The surpluses are used to fund capital projects like the Stevens Creek Trail and to protect against long-term liabilities.

Council members pointed to completion of the trail as a goal that would not be possible without a carryover balance, and warned that the cost of guaranteed health care benefits for retired city workers could soar far above the amount available reserves can cover. Garbage, sewer rates set to increase, library to keep funding

The debate over whether to use reserves was the broadest policy discussion Tuesday night, during a budget workshop that lasted five hours and 15 minutes. Perry dominated much of the discourse as he continued to hammer at budget concerns he has raised in the past, occasionally irking his fellow council members in the process.

There was some occasional levity, however. During a discussion of the city's troubled wastewater fund, Neely called for a "flushing awareness campaign." And while Perry held forth on a management structure he called "too many chiefs and not enough Indians," Perry managed to compare city manager Kevin Duggan to the pope.

When the excitement was over, the council had made its position on several key budget questions clear, coming out against a proposed $50,000 cut of the library's materials budget and siding with rate increases for both sewer connections and garbage hauling.

The city's wastewater fund has fallen on hard times as office vacancies have increased. Residential rates have been kept artificially low thanks to high prices assessed to businesses.

But when the businesses left town, the costs of maintaining the city's sewer's system stayed high, according to city finance director Bob Locke. And increases of 27 percent over the past three years have failed to make up the difference, as businesses have continued to use less water.

Presented with four options to bridge the nearly $1 million gap between expenses and revenues, council members asked staff to return with an alternative that would charge users based on their consumption.

Locke also explained to council members that the city's cost-plus contract with Foothill Disposal entitles the trash hauler to a return on investment of at least 6 percent each year. Garbage rates will increase 6 percent, under a staff proposal, bringing the cost for a 32-gallon can to $15 a month.

The city council is scheduled to adopt the final budget on June 14.
E-mail Jon Wiener at jwiener@mv-voice.com

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