City leaders to consider pricier parking, layoffs to bridge budget gaps

City leaders to consider pricier parking, layoffs to bridge budget gaps

Michele Ellson

Visitors to Park and Webster streets could soon be dropping a few more coins in the meters in order to help balance Alameda’s budget in the coming years.

Pricier parking – and parking tickets – are among the proposals city officials are offering to close a combined $7.1 million budget deficit spanning the next two years, a list that includes reduced library hours, fewer building renovations and layoffs.

The City Council will discuss the proposals during a public budget workshop on Thursday. They’re looking at $72.9 million in general fund revenues for 2013-2014 and a total budget of $153 million.

City Manager John Russo did not respond to an e-mailed request for comment on Friday.

City leaders are blaming rising pension and health care costs and a stagnant economy for an anticipated deficit of $2.7 million for this coming fiscal year and an expected $4.4 million deficit for 2014-2015. Since they opted to move to a two-year budget cycle, they’ll need to address both figures over the next few months.

In 2012, the city paid 37 percent of each police officer and firefighter’s salary toward their pensions, and 11 percent of non-safety workers’ salaries. They’re expecting pension and health care rates to increase between 6 percent and 12 percent per year, even with an agreement from workers to pay more toward their pensions and to begin paying some of their health care costs, a presentation to be offered to the council and the public on Thursday says.

The savings won in the concessions will be outstripped by pay increases and educational incentives included in the contracts. Public safety contracts approved by the council in December would cost the city $1.6 million over their four-year term if pay increases are granted as anticipated, though city officials said at the time that the educational incentives they included settled what could have been a costlier grievance with Alameda’s firefighters.

Meanwhile the board governing CalPERS, the state’s pension fund, is also considering changes that could boost cities’ pension costs further starting in 2015.

City leaders closed a $5.1 million budget gap without resorting to layoffs or reducing services this year, but council members warned that tough budget times lurked in the future as a result of rising costs and flat revenues. The city’s revenues are expected to grow by $5 million between between now and the 2017-2018 fiscal year, but expenses are estimated to grow by nearly $10 million, and the deficits are expected to grow to $7.4 million by that year if nothing is done.

To help close the gap, city officials are asking the council on Thursday to approve a voluntary layoff program and the $500,000 they need to fund it. They're saying the layoff program could save as much as $5.6 million over five years if none of the positions vacated by the layoffs are refilled.

In addition to saving money and staving off involuntary layoffs, the program would allow the city to skirt seniority rules that typically protect older – and more expensive – employees from being pink-slipped. Police and firefighters could agree to take the layoffs; their positions would have to be refilled immediately under the terms of federal staffing grants each has received which prohibit layoffs, though the jobs could theoretically be filled by cheaper workers. Other city department heads would need to wait three months before refilling vacated positions.

The layoff program – which would give workers who volunteer for it $25,000 or three months’ salary – could make it easier for officials to push forward a proposed restructuring of the city’s administrative departments, which if carried out would save $1.7 million over two years. Workers at the Alameda Housing Authority, Alameda Municipal Power and other city agencies not paid for by Alameda’s general fund – the budget city leaders are seeking to balance – won’t be eligible for a voluntary layoff under the proposal.

The city cut about 10 percent of its workforce in 2009, laying off 40 and leaving another 24 positions dark for an estimated $6.5 million in savings the following year.

Under the current proposal, the city would also close the library an hour earlier on Thursdays, cut part-time parks staff and pool maintenance, cut building maintenance and reduce fire department overtime.

The city could also raise an additional $375,000 a year by raising parking rates on Park and Webster streets by 50 cents an hour – the proposal will go back to the council in May – and could raise another $45,000 by increasing the cost of parking tickets, the budget presentation says. Business license fees could also rise.

The city could also ask Alameda Municipal Power to prepay $2.6 million in annual fees to the city over the next two years, something that the utility – whose budget is separate from the city’s did last year to help balance Alameda’s budget. The power company is itself facing a $4.9 budget deficit next year, which its leaders are proposing to cover with reserve funds.

Alameda will maintain a 25 percent reserve under the budget proposal, the presentation says.

City Treasurer Kevin Kennedy, who has been a critic of the city’s public safety spending – it’s 68 percent of Alameda’s general fund budget – called the cost-sharing concessions city leaders won from workers a “baby step” that didn’t fully address the city’s persistent budget deficits.

“Even with the reforms we’ve had recently in pensions, you still have the problem of public safety over time swallowing more and more of the budget. You can continue to trim and squeeze out the other parts of the budget, but you’re just going to be revisiting it again and again and again.”

He said the public is increasingly being asked to pay for services their taxes used to cover, including parks services and Alameda’s animal shelter, which is now being run by a nonprofit.

“It’s all because we’re not taking care of the elephant in the room,” he said.

The meeting begins at 7 p.m. Thursday in council chambers at City Hall, 2263 Santa Clara Avenue, and will also be broadcast on Comcast cable channel 15. An agenda and meeting materials are here.

The council will consider a draft budget on May 28 and is expected to vote on a final budget on June 12.

Comments

Submitted by Robert T. Sullwold on Mon, Apr 15, 2013

One point of clarification:

The public safety MOUs approved by Council in December provide that employees will share a portion of the annual increase in health benefit costs, not the total cost. For FY 2013-14, staff estimated that this agreement would save the City $27,202 (out of a total police and fire budget of $51.589,000). As it happens, in the same contracts, the City agreed to increase dental coverage for public safety employees. For FY 2013-14, the cost of this benefit increase is $27,121.

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