They have watched their city's budget deficit slowly shrink for four years, but on Tuesday the Rohnert Park City Council bent under the accumulating — and rising — weight of retirement and medical benefits and unanimously agreed to declare a fiscal emergency.
The move comes three years after the city last declared a fiscal emergency, in 2010. Then, it faced a $5 million deficit and that year officials, supported by employee unions, also convinced residents to approve a five-year, half-cent sales tax ballot measure.
Tuesday's decision was taken in conjunction with adoption of a $24.5 million budget for next fiscal year, with a $1.4 million general fund deficit. Remarks by several council members foretold tough contract negotiations as the city seeks to lower its personnel-related costs in upcoming talks.
"This could push us over the brink," Vice Mayor Joe Callinan said after hearing that the city's share of pension premiums for public safety officers could go from 47.6 cents of every dollar this year to 68 cents in 2016, in the worst-case scenario.
For all other city employees, the city's share of the premium is projected to rise from 26.5cents to 40 cents in 2016, finance director Cathy Orme said.
Told by City Manager Gabe Gonzalez that meeting the city's unfunded liabilities — including long-delayed infrastructure upgrades — would cost an additional $22.9 million a year, several council members uttered a word they last invoked at the recession's height.
"Looking at these numbers, I hope we can come up with something that can help us avoid bankruptcy," Councilman Amy Ahanotu said.
Medical and workers compensation bills also are projected to continue to rise, Orme said.
Gonzalez, who asked the council to declare the fiscal emergency midway through the budget presentation, said: "It gives us further ability to stay committed to address our fiscal situation on a long-term basis."
Some legal analyses have suggested that a state of fiscal emergency may, in some cases, allow cities to temporarily alter employee contracts, including benefit packages. Such an action, however, was not mentioned Tuesday.