City budget: "We're going to do less with less"
City budget: "We're going to do less with less"
In what has become an almost perverse annual ritual, city leaders discussed how they plan to address a projected $5.1 million deficit in next year’s general fund budget and bigger deficits in the years to come.
City staffers on Tuesday outlined a series of cuts that included layoffs and plans to close the city’s jail. City Council members, meanwhile, sparred over the Measure C sales tax proposal, which voters will consider through Election Day on Tuesday.
“We’re going to do less with less,” Councilwoman Lena Tam said.
Alameda has faced annual deficits due largely to steep growth in health and retirement benefit costs while the city’s revenues have been mostly flat. City officials anticipate that health care and retirement benefit costs will increase 12 percent a year over the next five years, while property taxes – the city’s main revenue source –are expected to grow by 1 percent this year.
The city has a reserve that would cover 24 percent of its general fund, but growing deficits could wipe that out over the next few years, a budget presentation offered to the council on Tuesday showed.
Assistant City Manager Lisa Goldman said city staffers worked to shelter residents from feeling the impact of the budget deficit by making cuts and changes that wouldn’t affect them directly.
But Tam said she thinks city leaders will be forced to make hard choices if Measure C doesn’t pass on Tuesday, saying the city will need to find money in its general fund to pay for vehicles and other items the half-cent sales tax would ostensibly fund. She said the council could, for example, be forced to think about cutting the rent it pays for the Alameda Museum – which could move into a renovated Carnegie Library if the tax passes.
“Sometimes the community fails to understand the circumstances when we insulate them too much,” Tam said.
Over the last several years the city has cut library hours, offloaded its animal shelter to a nonprofit organization and halved the number of free afterschool programs in the Island’s parks. City Hall is now closed on Fridays, dozens of city workers have been laid off and the city’s management ranks have been thinned out.
The police department has cut 19 positions since 2007, 14 of them police officer jobs, a document prepared by department leaders showed. In addition to cutting hours, the Alameda Free Library has seen funding for its collections reduced, Library Director Jane Chisaki said.
This year, city staff are proposing closure of Alameda’s jail, a move that has been contemplated before and one Police Chief Mike Noonan estimated could save the city $653,000 and result in the reduction of eight jobs. The city could save another half million dollars by continuing its agreement with Friends of the Alameda Animal Shelter to have the nonprofit operate the shelter next year.
Noonan said closing the jail, which houses about two prisoners a day, would both save Alameda money and absolve the city of the liability it poses. He said police are already driving prisoners to North County Jail in Oakland three days a week, which they would do daily if Alameda’s jail closes.
“In this economy, a jail is a ‘nice to have.’ It isn’t a ‘need to have,’” Noonan said.
Noonan proposed adding a clerk to help handle traffic tickets, which had been outsourced to another city to handle. He said the department would take back the customer service portion of the ticket process due to customer service foulups ad complaints on the part of the contractor.
The fire department is proposing to cut overtime and to pull in grant funds to cover some equipment costs for an additional $451,000 savings. Public safety services account for about two-thirds of the city’s general fund budgets, an amount that is similar to neighboring cities. Many other city employees aren’t paid with general fund money, city staff said, and the proposed budget would cover several additional salaries with other money.
General government and administrative expenses would be cut by $735,000, or about seven percent, through staff reductions, department reorganizations and the creation of a business license processing fee of $5 to $20 per license.
Parks and recreation funding would drop by $388,000, or 10 percent of the department’s budget, though the cut equals salaries of the department director and two others that would be shifted to the city’s athletic trust fund, which includes money from fee-based parks programs. City Manager John Russo said that while it’s not reflected in the budget, the department’s leaders will seek to increase the fees they charge for programs, while Recreation and Parks Director Amy Wooldridge said she’s working to make the department more efficient.
The city’s public works department would see additional vehicle license fee funds to help pay for maintenance projects, while Alameda Municipal Power will pick up the cost of maintaining the city’s streetlights.
City staff also propose borrowing $1 million in future payments from AMP to help balance its budget and using $800,000 in funds it didn’t spend this year.
Unions representing the city’s non-safety employees are considering contracts that would increase their share of the cost of their health care and retirement benefits; Goldman said Tuesday that management employees had okayed their contract earlier that day.
The new contracts would increase non-safety employees’ share of their retirement costs from 7 percent to 8.868 percent and also their share of health care cost increases, which could save the city about $87,000 this year and more than $187,000 in 2016-2017 if all the contracts are approved. Alameda’s firefighters agreed last year to pay more toward retirement benefits.
The city has convened a commission to study its rising retirement benefit costs.
The council is also considering a $17.8 million budget for capital projects, close to half of which would fund sewer projects, and another $4 million in maintenance spending when it votes on the budget on June 26. The city’s budget year begins on July 1.
A budget survey taken by 485 people showed that 70 percent would reduce the police department’s budget by between 2.5 percent and 5 percent to help balance the city’s budget, while 59 percent would reduce fire by that much and another 23 percent, by 10 percent to balance the budget. A majority of survey-takers wanted to cut general government expenses, while fewer wanted to see cuts to libraries and parks.
About two-thirds of those who took the survey supported increased sales, utility or hotel taxes, though 62 percent said they’d seek to cut capital expenses by 25 percent or more.
Senior Management Analyst Terri Wright said 300 of the 485 people who took the survey weren’t able to balance the city’s budget.
Meanwhile, council members took Tuesday’s budget discussion as an opportunity to tout the need for Measure C – and to question Councilman Doug deHaan’s public statements against the measure. DeHaan voted in favor of placing Measure C on the ballot but has since floated a separate set of budget estimates for the projects it would fund and published a half-page newspaper ad denouncing the sales tax measure, which would fund vehicles, equipment and facilities and be in effect for 30 years.
DeHaan questioned whether the city should be asking for money for a new pool, and emergency operations center and a replacement for Fire Station 3 while facing annual budget deficits. And he said the measure would impact the city’s general fund because a separate ordinance okayed by the council Tuesday would require city departments to save for vehicles if it passes.
“I did sign to put it on the ballot. I did not know the complete ramifications,” deHaan said. “After looking at all the various aspects of it, I do not feel very comfortable with it. This is not the complete solution to it. And 30 years is a long time.”
But Tam, Councilwoman Beverly Johnson and Mayor Marie Gilmore said the general fund will face bigger impacts if the measure doesn’t pass, because the city doesn’t have enough money to cover its vehicle needs. And they said the funding would leave the city with assets it can use, even if the groups they’re asking for fundraising and operations help aren’t up to the task.
Gilmore said she understands the city’s budget issues, but that she wants people to start coming up with solutions to the problems. She said that if people don’t like the tax increase the council put on the ballot, they should work with city leaders to help solve Alameda’s budget problems.
“I don’t want Alameda to be part of the party of no. That’s not helpful,” Gilmore said. “We need to work together to get to yes to move us forward. But just saying no and sitting on your hands is not helpful and is not useful. If you cannot support what this council is trying to move forward, then tell us what you will support.”