• Cost-cutting and revenue enhancements: FY 2009/10 looms

    By Marge Jameson

    Director of Management and Budget Jim Becklenberg reported at the March 4 City Council meeting that City staff anticipates a $1.3 million budget gap for the coming fiscal year. He was directed to return with ideas for revenue increases and for cutting expenditures.


    Report on the budget shortfall in Vol. I, Issue 24 (March 6-12, 2009) at “past issues”



    With the help of the Budget and Finance Committee and suggestions from the community, staff has researched strategies for closing the budget gap with both revenue ideas and cost-cutting measures and Becklenberg presented their report at the April 15 City Council meeting. The staff report outlines $2.2 million in revenue-generating options and another $2.5 million in potential cost-saving measures. He brought it to the City Council meeting and asked, “Are there any fatal flaws? Are we heading in the right direction or the wrong direction?”

    He got his answers and has sharpened his pencil, to return to City Council on May 20 with a refined budget. Because of the complexity of the issue, Cedar Street Times presents only the cost-cutting options this week. Next week, we will offer an overview of the revenue enhancement ideas.

    According to Becklenberg, the staff recommendations for the 2009/10 budget strategies “attempt to balance aggressive pursuit of new revenues with preservation of public safety and continued operations of the Library and Museum.” He pointed out that some of the revenue strategies could not be implemented in time for the 2009/10 fiscal year budget because they might require a vote of the public or public agency process requirements. He also noted that many of the options for reducing costs could affect basic public safety and “the existence of amenities that arguably affect the spirit and fabric of the community.”

    But he was quick to point out that the recommended strategies do not include employee layoffs. Those strategies that did involve the job status of City staff for the most part were suggestions to “defund” positions that are currently vacant, including the position of Deputy City Manager and that of a Maintenance Worker II. Other vacant positions include a second and third Maintenance Work II position, an upcoming Police Commander position, two Police Sergeant positions and two Police Officer positions; staff does not recommend “defunding” those positions.

    Councilmember Deborah Lindsay asked for clarification of why, when a number of sworn officer positions have gone vacant for a long period of time, one or both could not simply be defunded. Becklenberg said that it was a public safety issue.

    Pay reductions and/or furloughs are on the table for sworn police employees in the form of a deferral of a scheduled raise. Staff has recommended a 9.8 percent pay reduction or deferred raise, which would result in $275,000 savings. Such a deferral of the raise for one year (anticipated) would not, on the face of it, reduce services but it must be negotiated with employees. Staff recommends a 5 percent furlough of City Hall employees, which would mean closing city Hall for the equivalent of one day per month. This action would also need to be negotiated with employees, but would save the City $125,000 for Fiscal Year 2009/10. A 10 percent furlough was also on the table but is not recommended in Becklenberg’s opinion.

    Service reductions are also on the table. The staff report recommends eliminating funding for the City’s website redesign project, citing the fact that there have been multiple offers for volunteer and/or student help. The original website was done by an intern but has not been maintained and updated, according to many members of the public who have complained about it. Eliminating the funding would save $40,000. Councilmember Bill Kampe took issue with the idea, however. He said that he feels the website is too valuable a tool to be entrusted to amateurs or volunteers, and indicated that this would not be one of his choices for cost-cutting.

    “Current year staff has made significant progress in establishing a maintenance plan and performing preventive maintenance on public trees,” according to the report, so staff recommends reducing funding for preventative and routine tree maintenance, saving $60,000 per year, leaving only enough contract funding for emergency response, according to the report. Staff also recommends reducing contract services in Community Development by $20,000 and reducing the finance contract services budget by $20,000.

     


    Library, Museum stay but. . .



    Ideas which were examined but are not being recommended include closing the Library and closing the Museum, each of which would still cost the City $70,000 to secure the collections. But the report does recommend further reductions in part-time staffing at the Library ($30,000) while recognizing that such a cut will “reduce ability to serve customers, resulting in longer waits for check-out, delays in shelving materials.” The report says that it could cause the Library to reduce hours of operation to 20 per week. This suggestion met with stiff opposition, not only from the public but from Councilmembers.

    A number of individuals spoke, some passionately, about not only maintaining the Library at current levels, but about the need to improve staffing levels, but few had suggestions about how the City could do that.

    A glimmer of hope was seen when the subject turned to donor funds collected in the past for the purpose of adding a meeting room to the library. There is a fund of an estimated $400,000 sitting in a bank account. When it was determined that the building improvements could not take place, the funds were banked and earmarked for building maintenance. Becklenberg and staff have been directed to write to all known donors and ask them for permission to use the funds for staffing and purposes other than building. An enthusiastic Councilmember Lisa Bennett suggested they be given a short deadline and that the funds be parcelled out over at least two years. “Just do it!” she said.

    The report also recommends reducing General Fund support for the Museum in the area of basic maintenance and utility costs by $10,000. They say that such a reduction could cause the Museum to have to reduce hours of operation. This suggestion also aroused passion from citizens who went to the microphone to express their opinion. Bennett also commented that she felt the “downside risk was too much for the museum” and said she could not support such a cut.

    Reduction of the Recreation office and program costs to the tune of $20,000 is also recommended, which would likely mean that staff which currently has their offices at the Community Center would have to relocate to City Hall to consolidate administrative support and save money on copiers, phones, utilities, and other incidentals. Contract engineering services could be reduced, but staff believes this would reduce the City’s ability to complete needed capital improvements such as storm drain improvement. Staff also examined, but rejected, the possibility of closing some public restrooms and closing the Youth Center.

    Although listed on the revenue side of the equation, the idea of charging community groups for city services for events was floated. Sue Renz, speaking for Feast of Lanterns, told Council that charging for those services would in effect be cutting into money that Feast of Lanterns gives for scholarships for Pacific Grove students.

    Cost-cutting measures which finance and budget staff recommends thus total $833,000 of the total $2,447,000 they examined.

    But the consensus of the City Council, as voiced first by Alan Cohen and echoed in a brief summation by Mayor Dan Cort, is that they don’t want to make cuts: They want to pump up the City’s revenue streams. Some innovative ideas were put forward at the March 5 ‘town hall’ meeting, and more ideas came forward at the City Council meeting April 15. Cedar Street Times will offer those ideas next week, in our April 24 issue.

    posted to Cedar Street Times on April 16, 2009

    Topics: Current Edition, Front PG News, Marge Ann Jameson

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