City faces $800K budget shortfall

The Healdsburg City Council received grim news last week during
the first round of budget hearings at City Hall. The city is facing
an $812,000 shortfall next year, but isn’t looking to make many
cuts in spending to cover the gap.
“If you look at the department’s budgets, you’ll see that there
isn’t a lot of room,” City Manager Marjie Pettus told the council
last week. “We can’t get to where we need to be without significant
reductions in personnel … which means significant reductions in
service,” she said.
But, after going through a tough budget cycle last year, when
the council decided against making deeper cuts into the city’s
already thin staffing level, Pettus said she didn’t require her
department heads to turn in balanced budgets on the backs of their
employees.
“When we went through those exercises, it was a moral buster for
those on the chopping block,” said City Councilmember and former
Police Chief Susan Jones.
Pettus said since the council wasn’t interested in cutting the
public safety personnel, she didn’t think it was worthwhile to put
together budgets that people those jobs on the line.
Each council member agreed that the city can’t continue going in
the same direction it is currently headed and a call for fixing the
“structural deficit” was made by all members of the city’s
governing body.
“Every department head has done a diligent job and we can’t
afford it because our benefits are completely out of whack,” said
Mayor Tom Chambers. “I don’t know how we keep going down this road,
when nothing fundamentally is going to be getting better.”
An increase in health care costs and the Public Employee
Retirement System benefit contributed to an uptick in personnel
costs of about $800,000 over last year.
Based on a previously negotiated contract with the fire
department, wages increased by 5 percent for next budget year and
public safety contribution towards the retirement system remained
lower than other departments, with the city picking up a higher
portion of the bill for those costs.
“The city is paying the employee contribution for fire and a
small portion for police,” Pettus said of the retirement
contract.
City Finance Director Heather Ippoliti said she didn’t see the
city filling the budget shortfall this year without the use of
reserves, which could run out in less than five years.
Chambers said at some point the city will likely need to discuss
changing over to a two-tiered retirement system.
“It’s nobody’s fault that has those (public safety) jobs,” he
said. “Down the road, we can’t continue like this. We are going to
have to come to those groups with a two-tiered system or else we
are al going to go broke or have to outsource.”
City councilmembers said a wholesale change in the way public
agencies fund fringe benefits is going to be the only way to fix
the structural problem with their city’s and other city’s
budget.
“This isn’t a frustration with our employees,” said
Councilmember Jim Wood. “It’s frustration with a system that isn’t
really sustainable.”
City Councilmember Gary Plass said the council is facing a huge
problem and it probably won’t be a quick fix.
“I think we have to keep in mind that we didn’t get into this
problem overnight, and we’re not going to get out of it
overnight.”