Petaluma faces more budget cuts, layoffs
Published: Thursday, October 29, 2009 at 4:23 p.m.
Last Modified: Thursday, October 29, 2009 at 4:23 p.m.
Despite millions of dollars in cuts and more than three dozen layoffs in the past year, Petaluma officials say they must trim more than $2 million more in the next eight months to balance the budget.
That’s the grim news city council members will hear at Monday’s council meeting.
And it gets worse: most of that money can be saved only by cutting salaries and benefits, City Manager John Brown said.
“We’ve pretty much pulled out all the tricks,” to cut costs and save pennies, he said.
Thirty-eight employees have been laid off, another 14 or so open positions are frozen and part-time jobs have been eliminated, he said. Services have been reduced and employee unions have given up contracted pay raises.
Negotiations soon will be under way in hopes of convincing the 11 city bargaining units that their members should agree to salary and benefits cuts to make up for weaker-than-anticipated sales-tax revenues.
The sales tax makes up much of the city’s general fund budget and about 80 percent of that is spent on salaries and benefits.
“We were essentially betting on the economy bouncing back,” Councilman Mike Healy said. “Sales tax has really dropped off.”
Brown said his message to the council Monday will be a heads-up about the hard decisions ahead, not specific recommendations. Those likely will come in November and December, with any job cuts possibly coming in January.
But some union leaders aren’t convinced yet that they should agree to cut their own salaries and benefits.
Water Department employee Doug Silacci, president of the union that represents more than 100 city workers, said he hasn’t seen any specifics about how much Brown says needs to be cut.
“I’m sure there are other things he can cut before he cuts people,” Silacci said. “That $2 million he wants is to build up a reserve. Building a reserve off of people’s jobs, I don’t know.”
In June, the council approved its current $35.5 million budget, which was 10 percent smaller than the previous year’s and included 10 layoffs. That followed two rounds of mid-year reductions to keep spending in line with tax revenue.
The council cut nearly $4 million on Brown’s recommendations, though balked at the elimination of three police officers, which would have saved another $365,000. The budget also used up much of the city’s reserve fund.
At the time, employee unions rejected a 5 percent salary cut request, but gave up contracted pay raises and some extended their contracts with the city.
Brown said layoffs are possible this time around as well.
“When all said and done, it’s a salary-based reduction because there isn’t enough in services and supplies to make it up,” he said. “We’re looking at a pot for layoffs, and as an offset to that, fully or partially, salary and benefit givebacks.”
Those cuts would need to be agreed upon by the city’s employee unions.
Healy and Silacci both suggested the city proceed with revenue-producing retail projects already in the development pipeline to help ease the budget woes.
In the coming months, four large-scale projects will come to city leaders as they move their way through the planning process.
Those projects include a potential Target near the fairgrounds, a Lowe’s Home Improvement store on the northeast side of town, a Friedman’s Home Improvement near the old sewer treatment plant and a proposal to convert the silk mill building on Lakeville Street into a hotel.
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