Santa Rosa to consider cutting dozens of vacant jobs as it wrestles with growing deficit

The Santa Rosa City Council will soon consider cutting more than three dozen vacant city jobs as city officials grapple with rising personnel costs, despite recent signs of healthy revenue.

The council on Tuesday and Wednesday will study its options for the upcoming budget, which will cover the year that starts July 1. A panel of council members who guide the city’s fiscal policy choices received an advance staff briefing Friday.

The city’s preliminary spending plan would cut roughly 39 jobs, trimming about $5 million from the $431.4 million budget. That’s 10 fewer jobs than an earlier proposal, with six firefighting positions the council previously locked up in a hiring freeze accounting for most of the restored positions.

Santa Rosa voters last fall approved a six-year, quarter-cent sales tax hike billed as an emergency stopgap to allow the city to stabilize its finances without making drastic cuts to its workforce of about 1,300 employees. City officials will need to take further steps to eliminate the city’s growing deficit over the next several years if they are to make good on the claim that the tax hike was indeed temporary.

“This is simply a start,” said City Manager Sean McGlynn on Friday, likening future budget-cutting conversations to ripping off a Band-Aid.

The city would face a deficit of about $12 million in its general fund in its upcoming budget if not for the proposed cuts and the new sales tax revenue, according to city documents. The combination of trimming jobs and adding new taxpayer dollars puts the city $3 million in the black, which Chief Financial Officer Chuck McBride said would likely go to one-time costs associated with recovering from the October 2017 wildfires and infrastructure investment.

City staff blame the projected deficit largely on rising costs associated with employees’ retirement benefits, with the city’s most recent data pegging its unfunded pension liability at about $338 million.

The city’s payments to the California Public Employees’ Retirement System are expected to increase by about 20% in the upcoming fiscal year because CalPERS has lowered its expected return on its investments. Forecasting less than expected in the future causes cities like Santa Rosa to pony up more per year to make up the difference.

McBride has proposed attacking the city’s unfunded liabilities with an excess $4.2 million the city previously collected to pay down an old pension bond and then reinvesting the savings in future years.

“Every time we can bring it down, we put ourselves in a better situation,” he said Friday.

You can reach Staff Writer Will Schmitt at 707-521-5207 or will.schmitt@pressdemocrat.com. On Twitter @wsreports.