CERES — The City Council unanimously approved a 2014-15 budget Monday evening, but with the caveat that staff members will return by September to present proposals on how the city can start living within it means.
“As we keep dipping into reserves and getting closer and closer to a fiscal cliff ... if we get to a point where we need the money and we don’t have it ... I don’t want to be sitting in this chair when that decision comes. I’d rather say we need to come to the reality now,” said Mayor Chris Vierra.
The council acknowledged that putting an end to overspending would require layoffs that have been avoided for the past several years through the use of a half-cent sales tax for public safety and through employee concessions, frozen positions and dipping into general fund reserves. This year, $1.8 million came from reserves.
This is the seventh straight year in which proposed expenditures exceed revenues in Ceres. Layoffs might be needed, and the budget adopted already included freezing nine positions.
Deputy Police Chief Mike Borges retired in March, and when he left cashed out hours of sick leave and vacation time amounting to about $78,000. Public Safety Director Art de Werk said he was willing to wait to fill the position until expenses from that payout stabilized in August or September, but was surprised to learn that City Manager Toby Wells has suggested freezing the position for a year.
The frozen deputy chief’s position amounts to a general fund savings of $175,000 for salary and benefits.
Management positions in facilities maintenance and human resources will be unfrozen in favor of freezing or eliminating lower-level positions in the same departments. Each position swap will have a general fund impact of about $10,000, said Wells.
All the positions that will be unfrozen have at least one other funding source besides the general fund.
Wells’ city manager position was unfrozen when he signed a contract in April to accept it permanently after taking over for de Werk the month before. About $85,000 of Wells’ $130,000 is paid for by the general fund. De Werk said one of the reasons he left the post, in which he’d served on an interim basis since 2010, is because Borges was leaving and the Police Department needed more of his attention.
“If we don’t fill that position very soon, we would have the unfortunate distinction of being the only law enforcement agency of our size in the area with such a slim management contingent,” de Werk told the council. “I can’t tell you how concerned I am about liability because of the lack of oversight.”
Measure H, the half-cent sales tax, was designed to expand public safety, but for the past two fiscal years has been used to supplement the general fund to maintain staffing levels.
Revenue projections for Measure H made before the recession estimated $2.78 million in its first fiscal year of 2008-09, with an increase each consecutive year. Instead, it garnered $2.1 million and dropped for several years, said Wells.
Based on projections, by 2014-15 the city should have hired 11 more police officers and 13 firefighters, but the count remains at 10 and five, respectively. Measure H funds will be used to maintain those positions and pay $300,000 in firefighter overtime and $75,000 in police overtime this year.
In September, the Fire Department also stands to lose six firefighters who were hired with a grant from the Federal Emergency Management Agency. Wells said the city will apply for the grant again and is optimistic about its chances, but the application process is not expected to open until August, so it will not be awarded until after the current funding for the positions has expired.
Wells said city staff is working on a contingency plan to maintain the positions on a short-term basis while awaiting the results of the grant.
The city is also saving more than $860,000 in employee concessions. Employees continue to forgo raises, but for the first time in about five years, they will get back some of a 10 percent pay cut.
Two of six bargaining units completed negotiations with the city and will see a 5 percent restoration of pay over the next two years. The four bargaining units that are at an impasse with the city will see its last, best and final offer imposed July 1, which will include a 4 percent restoration of pay over two years.
About $450,000 of general fund reserves also will be used to close the deficit. The reserves will drop to about 22 percent. That brings the reserve to less than the council’s desired minimum of 25 percent and sparked much of the concern regarding the city’s history of deficit spending.
Wells said he will return to the council in September with several ideas on how to end that practice.