Possible city staff cuts loom

<p>With a budget that city officials say may not be sustainable beyond the next fiscal year, City Council members last week gave their preliminary thoughts on which tough changes may be needed to sustain the city's finances — including more staff cuts later in the year.</p><p>The proposed budget for the 2010-2011 fiscal year, which starts July 1, shows that costs will continue to outpace revenues, but that the city will avoid a deficit this year by using up the rest of its reserve funds. The General Fund budget is proposed at $32.5 million, a drop of more than $11 million from just three years ago, said City Manager John Brown.</p><p>Brown advised the council that “exhausting” the reserve fund leaves no margin for error or flexibility in the budget.</p><p>“I have cautioned that this is not a good place to be in,” said Brown about the reserve levels. “I feel the need to say that again.”</p><p>“From a big picture perspective, I'm not sure that the spending proposed is sustainable beyond 12 months,” said Brown. “I'll readily admit that this just gets us through this coming year.”</p><p>Brown said that city staff achieved the council's goal of avoiding further layoffs and maintaining service levels this year through a combination of the employee furlough system and cutting budgets for supplies, training and other programs. With sales tax revenue remaining low and revenue from new shopping centers not coming until late next year, more staff cuts may be on the horizon if revenue does not pick up soon, he said.</p><p>“You don't have a lot of other options without getting into (cutting) positions,” Brown said.</p><p>He said that although budget documents say there are 333 authorized positions and it may appear that there have not been many positions cut in recent years, that number includes jobs that were frozen and not budgeted for. There are actually 301.5 paid staff positions in the budget.</p><p>After hearing from the heads of each city department, council members gave their views on possible directions in the near future.</p><p>“If people want changes in this budget, every change is going to affect vital services,” said Councilmember David Glass. “The areas that will be cut will be police and fire because they are 70 percent of the budget.”</p><p>Councilmembers Mike Healy and David Rabbitt mentioned that costs of employee pensions are rising, and that the city should start discussing a two-tiered pension system. The two-tiered system would reduce pension costs, which some say are currently unsustainable, by offering new hires less generous retirement packages and letting current employees keep the pension plans they have.</p><p>Councilmember Mike Harris urged the council to act quickly on a plan for economic development that a consultant is preparing and is due out in July.</p><p>Brown announced that he has budgeted for a new “economic development manager” position to help the city find opportunities to improve the economy. He is in the process of recruiting candidates, and will have more information for the council at future meetings.</p><p>Mayor Pam Torliatt said the council has succeeded in keeping up service levels for residents as much as possible.</p><p>“We're trying to do the best with what we have with the situation we find ourselves in in the state and the nation and the globe” she said.</p><p>“The truth is that we are weathering the worst storm in our lifetime,” said Glass.</p><p>The council will adopt the budget at a council meeting before the July 1 start of the fiscal year.</p><p>(Contact Philip Riley at philip.riley@arguscourier.com)</p>