As city revenues continue to decline in an already suffering budget, the Berkeley City Council is scrambling for alternative ways to cut costs and raise revenues in the next fiscal year.

In order to combat a projected overall deficit of $16.2 million next fiscal year, city officials proposed a plan in May to eliminate 77 positions, the majority from public health and public works services. The plan reduces expenditures by about $11.9 million and relies on $4.3 million in new revenues.

At their meeting Tuesday, the council held a second public hearing to discuss the plan with city staff and residents.

“We keep monitoring revenues and unfortunately they’re not turning up … they continue to go down,” said City Manager Phil Kamlarz at the meeting. “We keep waiting for that turn, but we haven’t seen it yet.”

To generate new revenues in the next fiscal year, the council approved a fourth fee increase Tuesday that will establish a fee schedule for the Permit Service Center, which oversees permits for development-related services. The increase will create an estimated $794,010 in new revenues, according to a city report.

According to City Budget Manager Tracy Vesely, the city’s mental health program could lose $1.2 million if Gov. Arnold Schwarzenegger’s revised state budget is adopted. Schwarzenegger’s revision, released May 14, includes an almost 60 percent reduction in mental health realignment funds.

It is likely the state will not adopt a budget for several months, a city report said, citing alternative proposals to the proposed budget made by the Legislative Analyst’s Office.

“We’re still waiting for the state’s budget to reconcile itself,” Vesely said. “That will be a long process.”

She added that city staff will revisit the budget to evaluate the effects of the state cuts before next January.

Councilmember Max Anderson said the state has imposed heavy funding cuts that the city has no control over.

“I wish that all the factors were under our control but they’re not,” Anderson said. “We have to respond to them in a responsible way.”

During the hearing, Councilmember Laurie Capitelli suggested the city consider an emergency allocation and ask voters to pitch in.

“If each of us ponied up $20 we could raise a million dollars,” he said. “I’m continually amazed by what the citizens of Berkeley will step up for.”

Councilmember Kriss Worthington said if the council puts a measure increasing taxes on the November ballot, it will need to phase voters in with a progressive tax rate.

“It just isn’t going to fly,” he said. “If we have progressively slanted tax … then we can get a lot more support.”

As the June 22 deadline to adopt the budget rapidly approaches, Councilmember Darryl Moore said the council should consider everything “on the table.”

“It’s disheartening to hear things are off the table,” he said. “We are far past that. We are talking about people losing their jobs, losing their livelihood.”

Meanwhile, city staff continue meeting with union leaders to discuss ways to mitigate the proposed layoffs.

During the hearing, employees in the Public Health Division and other city programs expressed their concerns about the proposed 23 percent cut to their staff. The budget plan eliminates 18.25 positions – of which five are currently vacant – for $2.2 million in savings.

“The proposed staff reductions will undermine our ability to continue our important work and to respond to urgent and emergent public health issues,” said Janet Cusick, a nurse for the division.

The plan estimates a 30 percent reduction in residents served as a result of the division layoffs.

Councilmember Gordon Wozniak said the city is facing an “almost impossible situation” and must resort to a “share-the-pain” approach to help maintain its public health services.

“That’s not a good way to run a railroad, but that’s the only way we have,” he said. “There are not any good solutions here.”