Following more than a month’s worth of discussion, the Berkeley City Council is set to adopt a budget centering on citywide layoffs at its Tuesday meeting, though talks between city officials and unions could save the jobs, at least temporarily.
Facing a projected overall deficit of $16.2 million for the next fiscal year, city officials have proposed a plan to eliminate 77 positions, the majority from public health and public works services. The plan reduces city expenditures by about $11.9 million and relies on $4.3 million in new revenues.
Since then, the council has held two public hearings – on May 18 and June 1 – to consider alternative cost-cutting measures while ongoing discussions between union leaders and city staff have been aimed at mitigating the proposed layoffs.
“The budget is predicated on the fact that everything has gone flat in terms of our income and we’re trying to do the best job we can to spend money as wisely as possible,” Mayor Tom Bates said. “Obviously we’re facing a very difficult situation with having to reduce … our overall workforce.”
As a result of the discussions with unions, two side letters of agreement with Service Employees International Union Local 1021 and Public Employees Union Local 1 are being proposed to postpone the 77 layoffs for the first eight to 10 months of the fiscal year beginning July 1.
If the council passes the two items, union employees will reduce their work hours, take time off without pay and – for a few specific SEIU-represented positions – accept an incentive to retire before Nov. 30. The agreements between the two unions would save the city roughly $1.66 million, according to a city report.
Also on the table for consideration Tuesday are the mayor’s budgetary recommendations, one of which proposes that the council review the impacts of the state budget 60 days after its passage.
“Hanging over our heads is the issue of the state budget and, since Berkeley has its own public health and mental health departments, we expect further deep cuts to those services,” Bates said. “We won’t know the full impact of those until the state budget is passed.”
Gov. Arnold Schwarzenegger’s May Revise includes a 60 percent reduction in the state mental health realignment funds, which would incur a revenue loss of $1.2 million to the city’s mental health programs, according to a city report.
Despite decreasing revenues, council members and city staff have said the city is in much better shape than neighboring cities like Oakland, which faces a $31 million budget shortfall.
“We’ve had really good fiscal management over the years,” Bates said. “We don’t have any large-scale box retail in Berkeley. Those cities … don’t get the sales tax they count on. We have a much more diverse business population.”
Though voters narrowly voted down a special tax to save two of the city’s pools earlier this month, Councilmembers Gordon Wozniak and Kriss Worthington are set to ask the city to review the pools’ operating budget in hopes that the two pools can be maintained.
“We can move some money around,” Worthington said in an interview June 9, the day after the measure failed. “We can … go over some creative budgeting measures and see what we can pull off.”
The recommendation also asks the city manager to determine the feasibility of keeping the three neighborhood pools open through the summer.
Though the city’s financial status is relatively stable, there is much to grapple with in the coming fiscal year.
“It doesn’t come as a big surprise that we have problems,” Bates said. “We look to the future and see that unless our economy turns around, our problems are going to get worse.”