City manager Tom Bonfield has teased layoffs -- or, as management sometimes calls them, "reductions in force" -- as a possible way of meeting budget cuts for some time, in print interviews and most recently on last week's "Shooting the Bull."
Today, it became official, in the form of a press release, and in a two-page memo sent to City employees today as well. Thirty-five staff will be laid off, out of a total of 113 positions being eliminated in the FY10 City budget proposal. (A hiring freeze implemented in the fall helped preserve a number of open positions whose elimination could help with future budget needs.)
The 35 affected employees were informed personally last week, in advance of the announcement from City Hall today. The full budget will be released in time for next week's City Council meeting, but based on what's made it out into the public sphere today, we know a few things.
First, don't look for the worst-case (pre-cutback) budget gap to be up in the much-feared $20-40 million range being bandied about in recent months. A key factor driving that number was the pay equity program that started getting implemented this year -- an effort that will be on hold, according to Bonfield's memo:
Similarly, pay-for-performance merit increases won't be on the table this year, while the longevity salary boosts for long-serving employees will be reduced over the next two fiscal years before phase-out. The only funded pay increases this coming year will be those previously negotiated for police and fire.
- A reduction in 401(k) contributions for eligible City employees
- "Modest increases" in health care and dental premiums
- Elimination of benefits to employees working less than three-quarters time.
The other big, big change coming in this year's budget: more cutbacks for so-called non-city agencies, the non-profits that provide ancillary services and bickered their way to almost $826,000 this budget year -- down, sharply, from FY08's $1.55 million.
Coming next for non-profits: another $310k in cuts this coming year.
Last year, non-profits dominated much of the public hearing on the budget, fighting over what last year was a 47% cut. Don't expect much of a change this year, with the stakes still high for those groups that survived last year's process. (No new groups will be considered this year.)
Also changing this year, the various City funds, like those for downtown, the ballpark, transit, parking and so forth, will "not incur new costs, and will only be funded at a level to cover required costs, including debt and operating costs," according to the manager's press release.
That said, two new funds will be added: one for neighborhood economic development, and another for deferred maintenance -- two areas that have gotten significant attention from policy-makers and citizens alike.
As noted in the previously-adopted budget guidelines, the City tax rate will remain fixed at $0.54 per hundred dollars of property valuation. And while the City won't dip into its rainy-day money, last year's much-debated fund balance, the City will be leaving the fund balance at 11% of appropriations -- a figure that might be increased if there are savings in this budget year.
Additionally, no new debt will be issued this coming year -- whether this impacts voter-approved bonds or simply COPs and other city-initiated forms, we're not sure yet (and we'd assume it doesn't impact water and sewer bonds funded out of utility revenue.)
Bonfield will unveil the budget at Monday night's City Council meeting; a series of special work sessions on the budget follow on May 26-28, before a public hearing on the budget on June 1.