Budget Discussion on December 16, 2008
This is the PowerPoint used by various department
heads to explain questions that had been asked at the previous meeting on
December 9. (Item
16 on agenda for December 9 council meeting) The first few slides explain
the budget process and schedule.
***(The agenda for the
meetings of the council on Tuesday January 6 at 4PM (item 5) and Thursday
January 8 at 6PM (item 1) includes a vote on the proposed cuts:
CONSIDERATION OF AUTHORIZATION FOR THE CITY MANAGER
TO IMPLEMENT THE
BUDGET REDUCTION PLAN
As previously reported to Council,
current revenue and expenditure projections indicate budgetary shortfalls of $3.9
million and $20.0 million for fiscal years 2008-2009 and 2009-2010,
respectively. In early December, the Interim City Manager submitted a budget
reduction plan for Council's consideration. This plan was the subject of the December 4 Council Budget workshop
and was discussed again at the December 9 and
16 Council Meetings. The plan has
now been revised to reflect additional cost savings measures and minor
adjustments with no impact on anticipated budget savings. Approval of the
resolutions will authorize the City Manager to begin implementing the proposed
budget reduction plan which identifies over $20.0 million in expenditure
reductions that will bring the expenditures in line with projected revenues.
Several factors will impact how
this plan is ultimately implemented - including the proposed sales tax increase, the
early retirement program, and the continuing discussions with the bargaining
groups. As these items are resolved, the budget reduction plan will be adjusted
with the goal of providing those services most essential to our residents while
minimizing employee
layoffs. Approval of the plan as proposed will allow the City to move forward
in the most fiscally prudent manner while still allowing the flexibility to make necessary adjustments. Staff
recommendation: Council adopt the following resolutions:
A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA AUTHORIZING THE CITY MANAGER TO
IMPLEMENT THE BUDGET REDUCTION PLAN AS DESCRIBED IN ATTACHMENT A EXCLUDING THE PROPOSED CLOSURE OF PARKWAY
POOL AND GYMNASIUM
B, RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA AUTHORIZING THE CITY MANAGER TO
IMPLEMENT THE BUDGET REDUCTION PROPOSALS FOR THE CLOSURE OF PARKWAY POOL AND
GYMNASIUM
C. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA DIRECTING STAFF TO PURSUE A SALES TAX INITIATIVE
D. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA DIRECTING STAFF TO PURSUE A UTILITY USERS TAX INITIATIVE
CLOSED SESSION
Announcements of actions taken in
Closed Session shall be made available by noon on Wednesday following the Council
Meeting at the City Attorney's office in accordance with the Ralph M. Brown Act
(Government Code 54957. 7).
, CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO
GOVERNMENT
CODE 54957.6
Agency designated representatives:
Jim Sandoval, Scott Tulloch, Marcia Raskin, Bart Miesfeld, Rod Betts, Maria
Kachadoorian, Leah Browder
Employee organizations: CVEA,
IAFF, POA, WCE, Mid-Management, Professional and Unrepresented Groups)
I was told that these cuts
have already taken place as part of consolidation of departments:
1. The
head of the Communications Department will take early retirement and not be
replaced.
2. The
job of Jack Griffin, who has been the head of the combined Public Works,
Engineering and General Services Departments since the last round of budget
cuts combined them all, has apparently been eliminated and all functions
combined with the Planning and or Development Services Department.
3. Ed
Van Eenoo’s job at Budget Director has been eliminated, as has the Budget
Department. Finance has people who can write the budget and explain it to the
public as well as do the necessary accounting and finance work.
4. Other
Departments will also be consolidated.
CURRENT DEFICIT:
THESE ARE THE COUNCIL SUPPORTED CUTS SO FAR:
The
mayor on December 9 proposed $400,000 worth of cuts from the mayor and council
offices. The full council still has not discussed this. The council should also
show some leadership and reject the raises they received last January and any
that are proposed this year. Councilman Ramirez rejected his raise last year.
The council and mayor salaries are based upon the salaries of Superior Court
judges. The mayor gets 60% of a judge’s salary and the council members get 40%
of her salary. There is a disconnect with the community when you consider that
the council members are considered to be part-time but have a take home pay of
$48,199, which is more than many residents get for full time jobs. Maybe a
charter change for salaries should be on any tax increase ballot???
Last year the
mayor’s take home pay was $120,497 without “other benefits.” (Her chief of
staff’s take home pay was $126,657. She has agreed to eliminate this position,
but not until July.)
The charter sets mayor and council wages,
but they don’t have to take the raises. There is also the matter of the car
allowances (other benefits) they receive. Council members Castaneda and Ramirez
have rejected theirs, but the others still take them. The mayor gets $13,747
and each councilperson $7,299. This is over and above what the city pays toward
their pension (for which they become eligible after 5 years) and health care.
No one should be taking their “other benefits,” and each of them should be
setting an example by paying his or her 8% share of their pension payments. It
is unfair to expect other employees to forgo their raises and pick up at least
part of their pension costs if the council is unwilling to do the same.
The
Recreation Department reported on the money saved by installing solar heating
and more efficient boilers. They also mentioned that if the Nature Center were
open only 5 days a week instead of six the cost to the city would be reduced to
just over $300,000. The mayor rejected that and insisted they should stay with
the 1 million cost and try to raise that.
Public
Works reported on progress in changing all streetlights to LEDs, which will
save considerable electricity.
The
police chief used a number of tables to explain that the Chula Vista police,
according to a SANDAG
report and some other research done by the department, actually have only
1.05 officers per 1,000 people, which is the lowest ratio in the county and
among an assortment of cities in the state. They also cost less per resident
than the county average and have more officers per lieutenant and per sergeant.
Most people in Chula Vista have been led to believe that all their raises over
the years had made them the highest paid in the County. I guess there are
different ways of looking at data.
The
Fire Chief explained that each fireperson works a 56-hour shift, which is an
automatic 16 hours per week of overtime. This is much cheaper than having them
on 40-hour shifts and having to hire more firepersons. He also showed a graph
explaining the amounts of other overtime. Some overtime is reimbursed by other
agencies.
Of course it has not
been explained why every engine has to always have 3 people staffing it. Since
there are only two trucks it probably is necessary to always have 4 people
staffing them. This is because you have to have a truck to fight a fire. They
have the hoses and pumps for the water. The engines contain other types of
equipment-shovels, axes, etc. The fire contract requires full staffing, but 90%
of all calls are medical. Obviously two paramedics would be fine for these
calls. If there is an actual fire both a truck and an engine respond and
generally more than one station responses, so if one engine had only two people
one would think that there would still be adequate people present to fight the
fire, and there would be time to call for others from other stations while the
truck was coming.
I have suggested the city take over ambulance services and
have the firepersons on duty staff the ambulances. This way the city would be
reimbursed for the medical calls. Now the fire engine responds as well as the
ambulance, which at the very least is a big diesel expense. Since fire stations
tend to be closer to homes they usually get there first, but if the person
needs to go to a hospital everyone must wait for the ambulance.
Many
people were angry with the police because they believed the police union had
said they would not negotiate until the “zoo” (The Nature Center) was closed.
In reality all the city unions have agreed to delay their contractually
required pay raises until February first to allow more time for negotiating
with the city. The pay raises will cost the city 6.5 million dollars for the
next two years. The city feels delaying them to better economic times is
necessary to avoid layoffs, although the PowerPoint shown on
December 4 shows there will need to be layoffs with or without the employee
raises. There are less without:
This same PowerPoint
also shows that while income for the city is declining personnel costs are
going up considerably.
There are also tables
showing how much quality of life and public safety programs will be cut even
without COLAs (cost of living adjustments). We should all be concerned about
how fewer and fewer people are being expected to do more and more work. They
can’t keep up with maintenance issues now. Our libraries are closed one day a
week on the west and Eastlake Library in the east is only part-time. What is
going to happen with fewer employees???
Personnel are a big cost, because personnel provide the services we want and need from the city. We need good quality jobs in our city, paying a living wage and benefits. Some of the work now being done in the city is being done by poorly paid part-time employees without benefits. (These are the majority of jobs cut in the last few years and to be cut in 2009.) The city is one of the largest employers in the city. Layoffs or reductions in pay and/or benefits will not be good for the long-term financial health of the city. Management has not had a raise for several years and takes a one-week furlough-a wage reduction of 2%.
Another
big problem “challenge” the city has is debt. (Click here to view the
PowerPoint.) (This was item 10 on the 12/16/08
council agenda.) The council in the past unfortunately 
decided
to borrow money to build a new corporate yard, police station and city hall.
They will be paying off this debt until 2034. Some of this debt must be paid
with General Fund money yearly, and some of it was to be paid with development
fees. There were almost no development fees in 2008, and 2009 does not look
real rosy at the moment. This is why the Treasurer asked the council on 12/16
to borrow the money to pay this part of the debt from the Transportation
account (another capital fund). This money will have to be repaid with
interest, adding to the debt on this loan. These loans will probably need to be
restructured which will probably be expensive in this market. Some of the
options being considered are to refinance for a longer period and to not make
payments for several years. The city’s current debt
payments are $11.9 million or 8% of the General Fund budget per year.
Item 12 on the Agenda
on 
December
16, 2008 gave members of the public the opportunity to suggest ways to
enhance revenue. The city manager also presented some ideas, which are the last
few slides of the PowerPoint.
The plan is to put a
half-cent or more sales tax increase as a mail ballot item in April. This will
cost $250,000. To do this all the council members must vote that there is a
fiscal emergency.
We now have a Utility
Users Tax but it needs to be updated. The council refused to do this last year,
but it will be brought back to them again. The plan is to increase all the
other fees and the TOT, but it is unclear if the increase in the TOT will go to
the General Fund or the Chamber of Commerce, which is a Political Action
Committee (501c4).
Many residents when
they spoke on the 16th suggested increasing fees and even adding
fees to existing programs that the City Manager was suggesting cutting to
prevent cutting the programs. Many also suggested a sales tax increase, but it
is still uncertain if this could pass as a general tax (requiring 51% of the
vote). Many people want the money earmarked, but this would require a two-
thirds majority to pass. A solution might be to have an oversight committee as
the school bonds have comprised of members of various Friends groups (Library,
Recreation, Nature Center), Community groups (SWCVCA, NWCA, Crossroads II, SBF)
and the unions.