By Rick Elkins
Visalia - Furloughs and layoffs may be in the near future for employees of the city of Visalia after the city council voted unanimously Monday night to take such actions to cut into a bulging budget deficit.
Council members rejected the idea of offering incentives for early retirement and expanded the layoffs and furloughs to all departments in the city, including public safety.
The action was taken in light of a $5.7 million budget deficit facing the city that has seen revenues drop off dramatically the past six months. On Monday night, the council declared a fiscal emergency.
City Administrative Services Director Eric Frost laid out the dire financial situation the city is facing, a process going on more than six months now. “Since March, our problems continue. In fact, they've gotten worse,” he told the council. He added the city is facing a number of “years of deficit spending” and that fundamental changes are needed.
He pointed out that sales tax and property tax revenues – which make up the bulk of the city's general fund – are way off and continue to fall. Frost said the city expects a drop of $1.3 million from sales tax revenue alone.
On top of the weak local economy, the city is facing a hit from the state that is struggling with its own economic mess. Frost said the state could take more than $2 million and that the city faces a $2.5 million increase in its contribution to the PERS retirement system.
City Manager Steve Salomon said it will take 30 to 60 days to finalize the cost-cutting measures – including furloughs and layoffs. He noted the city needs to find long-term cuts and classified layoffs as long-term solutions, and furloughs as short-term.
“There's some processes to go through here to get at some hard numbers,” said Salomon. “It's going to be hard. We have a lot of talented people and hopefully we can get a lot of cooperation,” he added.
However, with nearly 75 percent of the general fund spent on public safety, he admitted that police and fire will not be spared layoffs and furloughs.
Chris Ortiz, secretary for the Visalia
Firefighters Association that has been very visible in opposing cuts to
firefighters' pay as well as to layoffs and furloughs, said after the
vote that the firefighters will work with the city to ensure public safety.
“We've been willing to work with them from day one,” said
Ortiz, adding that there is not much the department can give. He explained
Visalia has .46 firefighters per 1,000 residents, the lowest ratio in
the Valley. He defended the association's decision to not defer a 4 percent
raise that becomes effective July 1, saying that was negotiated in good
faith and that the firefighters had made other concessions to get that.
“We understand sacrifices. These
are very hard decisions to make,” he said.
The city had asked all bargaining groups to defer the 4 percent pay hike
as a means of saving more than $1 million a year, but all but one of the
five bargaining groups rejected that proposal.
Salomon was instructed Monday to finalize the city's layoff and furlough policy. “We'll try to work the furlough thing out that makes the most sense,” he promised the council.
The action Monday night is designed to save the city $3 million a year. Other budget-saving actions include:
· Reworking major vendor contracts
for a savings of $300,000;
· Coming up with a list of cost savings totaling $200,000; and
· Reducing tree-trimming contract by $30,000.
Spared the budget ax was a $40,000 cut to the youth service grants given by the city ($160,000 total) and the council's discretionary fund, a total of $10,000.
In declaring a fiscal emergency, the council authorized using the Measure T economic uncertainty fund to balance the budgets of police and fire. For the 2009-10 fiscal year, police will get $745,000 and fire $497,000. Measure T is the city's quarter percent sales tax to increase public safety, but it was designed to increase those departments, not supplement general fund money. Monday's action required a fourth-fifths vote.
Councilman Greg Collins, noting this is about the 20th city budget he has worked on, said this is by far the worst financial situation facing the city he has seen. He added this is the first time he can remember the city has asked employees to forgive a pay increase.
Mayor Jesus Gamboa agreed these are
tough times, and said he was disappointed with the city bargaining groups
for not cooperating on deferring raises.
“We're worrying about ourselves,” he criticized. “This
is not the time. We need to worry about the solvency of the city.”
The city has already taken a number of steps to reduce spending, including freezing open positions, postponing capital projects, reducing travel and dipping into reserves. So far, those actions have saved $2.14 million, but only $440,000 of that is a long-term savings. Monday's action is pointed more to long-term savings.
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