City makes round of mid-year cuts

The Healdsburg City Council approved a mid-year round of budget
cuts that included employee layoffs and reductions in supplies and
services amounting to $127,400 from the General Fund.
But, the cuts weren’t nearly enough to make up a more than $1.1
million General Fund shortfall the city is facing for the current
fiscal year.
“The cuts get us a lot closer to where we need to be,” said
Mayor Jim Wood, after a two hour meeting Tuesday night.
According to Wood, the city manager is continuing to look for
other ways to make up part of the gap before the year’s end.
The city entered the 2009-2010 budget year projecting to spend
$555,000 of reserves to balance the budget. But, due to the
declining economy, which means lower than expected revenues from
sales and property taxes, the city is now finding itself an
additional $550,000 short at mid-year.
“With 50 percent of the year complete, our General Fund revenues
are at 33 percent of projections and expenditures are at 52
percent,” said Finance Director Heather Ippoliti.
The city council voted to eliminate three full time
administrative assistants, a part time administrative assistant, an
office assistant, two community services officers and an equipment
services supervisor in the finance department.
At the same time, two administrative specialist positions will
be created, a police technician job will be created as well as a
Mechanic 2. The reduction and reclassification of the positions
will save the city $134,000, of which $67,000 will benefit the
General Fund.
The employees whose positions are being eliminated will have the
ability to reapply for the new positions — a concept some were
unhappy with.
Carol Wilson, an administrative assistant that will be laid off
in April when the reductions take affect, disagreed with the way
the process would play out.
“I think everyone here realizes how bad things are,” Wilson
said. “But my question is, knowing that people have to be layed
off, why doesn’t seniority count for anything? By laying off
everybody and creating new positions, seniority counts for nothing,
all the years of hard work and dedication mean nothing.”
But if cuts aren’t made, and the city continues to balance the
budget with the use of reserves, the city will run out of the just
over $3 million in reserves in the 2012-2013 budget year, Ippoliti
said.
“I don’t believe we can in good conscience use reserves to fund
a $1 million deficit,” Wood said. “And I believe that number may be
bigger next year.”
So far this year, through the first two quarters, sales tax is
about $400,000 off of the projected budget, property tax is 32
percent less than this time last year, Transient Occupancy Tax
(TOT) is down 9 percent and the Business License Tax is 62 percent
lower than the same time last year.
And Ippoliti isn’t convinced the situation is going to get any
better.
“I’m hearing that recovery has started nationwide, but I’m not
hearing anything about recovery starting in California,” she said.
“As long as you are seeing unemployment go up, and possibly seeing
foreclosures continue … I am very concerned that we haven’t hit
bottom and there’s a ways to go. It’s one of the reasons I am very
concerned about our reserves.”
Ippoliti added that because of California’s $20 billion deficit,
the state may come looking to the city again in the form of
additional “takeaways.”
City Manager Marjie Pettus said she is meeting with department
heads and city staff to work on the current and upcoming budget,
and each department will have to come up with ways to present a
balanced budget for 2010-2011.
“This is probably one of the most uncomfortable things we do on
the council,” said councilmember Gary Plass. “During the budget
process, we’re going to look at every nook and cranny, but as far
as adjusting the 09-10 budget tonight, I really don’t see much
choice.”
“I think this is just going to be the first of some really
difficult meetings this year,” Wood said. “I don’t want to say the
sky is falling, but it’s damn close.”