OAKDALE -- City officials outlined several painful choices including cutting employees' salaries and having them pay more of the cost of their benefits during a budget workshop Wednesday for the 2012-13 fiscal year, which starts July 1.
Officials said they don't expect the local economy to roar back to life any time soon. At best, they hope it has hit bottom and sales and property taxes and other city revenues will hold steady.
But city officials say Oakdale faces increasing costs for employees' health care and pensions. They also said the city's reliance on short-term solutions over the past few years no longer will work.
The city has borrowed from its various accounts to plug financial holes with the expectation that the economy and the city's finances would rebound. But that has not happened in the recession of the past half-decade or so.
"I've been on the council seven years," Councilman Tom Dunlop said. "The policy was, 'Let's just get by because things will get better in two years.' "
Wednesday's budget workshop was the City Council's first public look at the 2012-13 spending plan. Officials stressed that the workshop was the starting point for discussions. They said some actions will require the approval of the city's labor groups.
Oakdale also faces structural problems with its budget. For instance, interim Operations Manager Stan Feather said Oakdale has failed to set aside reserves for such items as replacing police and public works vehicles and paying legal liabilities.
Instead, the costs for these and other items have come from the $8.6 million general fund, the city account for public safety and other basics.
Oakdale also faces the prospect of raising sewer rates to bring in enough revenue to pay the debt service on the approximately $12 million upgrade to its waste-water treatment plant.
The city is required to set aside $855,000 in reserves for the debt in the 2012-13 budget and then start making the first of 20 annual payments of $855,000 in the 2013-14 budget. City officials say sewer revenues are not sufficient to establish the debt reserve and make the annual payments.
Some council members' proposals Wednesday night include abolishing the city policy that allows employees to bank unused leave time and then collect large payouts when they retire or leave the city for other reasons. Mayor Pat Paul suggested that city officials look at where Oakdale can consolidate positions.
Council members stressed that Measure O, the three-year ½-cent sales tax that started in April, be used for public safety, the community and senior centers as officials promised the voters who passed the tax in November.
The council is expected to discuss the budget at its June 5 meeting.