City workers face furloughs, deeper cuts

<p>Efforts to bring Petaluma’s budget into balance over the next 18 months will require significant help from city employee unions, through pay cuts or possibly layoffs, officials said Monday.</p><!-- Nothing to do. The paragraph has already been output --><p>Discussing a $2.3 million shortfall forecast through June 2011, City Council members said they want to see more detailed options for both trimming the budget and raising revenues.</p><p>Mayor Pamela Torliatt and other members said they favor an increase in the “transient occupancy” taxes paid by visitors who rent hotel rooms in town.</p><p>Councilmember David Glass said Petaluma’s bed-tax rate is lower than nearby cities and raising it is a “no-brainer” way to generate revenue.</p><p>Increasing that tax could bring in $140,000 a year, Torliatt said.</p><p>Any increase would have to be put to voters, either in June or November elections next year. Councilmember Mike Healy pointed out that in November, voters will also face a sewer rate rollback measure that the city opposes, and said it might not be wise to add a tax measure to that ballot.</p><p>Healy said he’d like to see more immediate steps taken to boost revenue, citing proposed shopping centers that are seeking approval.</p><p>City Manager John Brown’s estimate that those projects should not be counted on to generate revenue in the next 18 months is “awfully conservative,” Healy said.</p><p>In addition to a hotel-tax hike, the city will look into the possibility of an “admissions tax,” officials said.</p><p>Such a tax could be collected on tickets purchased for events like live music, theater and sporting events in town, Brown said.</p><p>Even with possible new revenues on the horizon, further cuts in city personnel are likely, Brown said. The city’s sales tax is projected to be down almost $1 million and there is no reserve set aside in this year’s budget, he noted.</p><p>“We’re chasing a target that’s moving away from us,” he said of sales tax figures. “We don’t have any cushion to fall back on.”</p><p>One of the city’s first acts should be to implement a one-week furlough following the Christmas holiday in late December, Brown suggested.</p><p>That could save $900,000 this year and next, he told the council.</p><p>He will also be seeking concessions in salary and health-care costs from represented employees in negotiations that will take place over the next few weeks, Brown said.</p><p>“It’s going to have to be some kind of personnel-driven reduction, and the question is one of ‘how much’ rather than ‘if,’” Brown said.</p><p>Specific cuts won’t be known until his negotiations with unions are concluded, Brown said.</p><p>“Labor has an awful lot to say about how this goes down,” he told the council.</p><p>The city has already trimmed 52 positions from its budget over the past 18 months, either through layoffs or early retirements. A proposal to cut 5 percent from employees’ pay this fiscal year wasn’t accepted by workers, prompting further cuts.</p><p>About 80 percent of the city’s $35 million general fund is spent on salaries and benefits, officials said.</p><p>“At this point ,we’re pretty high up in the tree,” Brown said. “We’ve gotten most of the low-hanging fruit.”</p><p>That remark drew criticism from the head of the city’s largest employee union, the Association of Federal, State, County and Municipal Employees, whose members filled the council chambers Monday.</p><p>Doug Silacci, a water department worker and president of the 100-member union, said employees are not “low-hanging fruit” and suggested the council cut “dead branches” from the city budget instead of asking younger employees to give up salary increases they’ve earned.</p><p>Council members said if a furlough is enacted, it should be done in a flexible way that avoids a major one-time hit to employees’ paychecks. The salary reductions that come from a furlough should be spread out as much as possible, some members said.</p><p>“The most benevolent thing I’ve heard here tonight is the furlough program,” Glass said.</p><p>Brown said he hopes to update the council on specific cuts at a Nov. 16 meeting, with decisions to be made no later than Dec. 7.</p><p>(Contact Corey Young at corey.young@arguscourier.com)</p>