LATHROP – There are barely two weeks left of the 2009-10 fiscal year.
And as the end nears, the City of Lathrop, just like other cash-strapped cities in the country that are financially hemorrhaging in the clutches of the Great Recession, is still scrambling to find more ways to stop the budget bloodletting.
For the city with the river that runs through it, the remaining financial bloodletting that needs to be plugged is an estimated deficit of $1,262,768 based on the established five-year forecasting model or survival plan.
Currently, Lathrop’s estimated reserves entering the 2010-11 fiscal year starting July 1 is $5.6 million. Concrete figures won’t be available until the end-of-the-fiscal-year audit is completed.
The only thing that prevented the city’s reserves, or savings account, from being cannibalized even further this year to eliminate the deficit was the execution of several drastic across-the-board cost-cutting measures identified in a five-year survival plan put together by city staff with council’s blessings at the beginning of the year.
Already, the city has instituted the first three money-saving phases by getting rid of 23 city positions through a combination of employee layoffs and unfunding budgeted but unfilled positions, plus streamlining staff at city hall. This move resulted in the lay-offs of the Community Development director which essentially eliminated that department, and the Human Resources director with those responsibilities piled on top of Becky Enneking’s job as Neighborhood & Community Services director who is also the interim director of Parks and Recreation.
The layoffs, which nearly eliminated the parks maintenance division, were followed by the Friday furloughs – closing City Hall on Fridays – resulting in a pay cut of 10 percent for all city employees.
The council also decided to not fund three deputy sheriff positions in the Police Services which, along with other cost-cutting actions, decreased the city’s police contract with the San Joaquin County Sheriff’s office by $107,328.
All together, the implementation of the above cost-cutting measures resulted in a savings of about $3,300,000 in the city’s general fund, according to the report presented by City Manager Cary Keaten during the first day of budget reviews earlier this week.
In the same preliminary budget report, Keaten stated that with the coming fiscal year’s operating revenues at $12.5 million and actual operating costs at $13 million, the city will need to take out $540,000 from its reserves or savings account to balance the 2010-11 budget. That action, however, will present the city with the challenge of replacing that same amount back into the reserves by achieving “annual savings and other contractual concessions,” the city manager explained.
How to realize those cost savings and how to implement those “contractual concessions,” which could be either by more lay-offs or additional across-the-board salary cuts, are things that continue to be discussed between the council and city employees.
Should the city’s top brass take more pay cuts?
Before he resigned from the council in the spring, former council member Robert K. Oliver stated a number of times during council meeting discussions that he considered city hall employee salaries “still top heavy.” City hall critic Dan Doyle agreed and told the council at a recent meeting that paying 10 city employees more than $100,000 a year is just too much. However, another city critic and mayoral candidate J. Chaka Santos has also come on the record before the council saying he does not think the city’s management staff is being overpaid for the heavy work load that they do which has been compounded by the shrinking staff, and congratulated them for doing a good job under trying circumstances.
As recently as the last regular meeting on the first week of this month, the top management’s high salaries came under fire when members of the union employees (Service Employees International Union) asked the city to end the “costly abuse of the vacation cash-out privilege” enjoyed by the city’s top brass “while front-line city employees are being laid off and services to residents are being cut.”
According to the city’s web site, Lathrop paid a total of $65,814.97 in vacation buy-backs to 16 employees during the 2009-10 fiscal year.
“It is likely this issue came up at the City Council meeting because we are currently negotiating concessions with our represented employees,” Keaten said.
He added that steps being undertaken to solve the budget deficit is a universal effort that includes every city employee, from the top of the totem pole to the bottom rung.
“The city needs to save money and we are looking at many options to do so. No one is exempt. For example, the City Manager (me) volunteered to lead negotiation concessions with the City Council. These negotiations are not yet complete,” he said.
He did not say what those negotiation concessions actually entail, or if they involve talks on the top-heavy salaries of the city’s top brass as a way to trim the budget deficit and, at the same time, prevent any further lay-offs of rank-and-file employees.
And as the end nears, the City of Lathrop, just like other cash-strapped cities in the country that are financially hemorrhaging in the clutches of the Great Recession, is still scrambling to find more ways to stop the budget bloodletting.
For the city with the river that runs through it, the remaining financial bloodletting that needs to be plugged is an estimated deficit of $1,262,768 based on the established five-year forecasting model or survival plan.
Currently, Lathrop’s estimated reserves entering the 2010-11 fiscal year starting July 1 is $5.6 million. Concrete figures won’t be available until the end-of-the-fiscal-year audit is completed.
The only thing that prevented the city’s reserves, or savings account, from being cannibalized even further this year to eliminate the deficit was the execution of several drastic across-the-board cost-cutting measures identified in a five-year survival plan put together by city staff with council’s blessings at the beginning of the year.
Already, the city has instituted the first three money-saving phases by getting rid of 23 city positions through a combination of employee layoffs and unfunding budgeted but unfilled positions, plus streamlining staff at city hall. This move resulted in the lay-offs of the Community Development director which essentially eliminated that department, and the Human Resources director with those responsibilities piled on top of Becky Enneking’s job as Neighborhood & Community Services director who is also the interim director of Parks and Recreation.
The layoffs, which nearly eliminated the parks maintenance division, were followed by the Friday furloughs – closing City Hall on Fridays – resulting in a pay cut of 10 percent for all city employees.
The council also decided to not fund three deputy sheriff positions in the Police Services which, along with other cost-cutting actions, decreased the city’s police contract with the San Joaquin County Sheriff’s office by $107,328.
All together, the implementation of the above cost-cutting measures resulted in a savings of about $3,300,000 in the city’s general fund, according to the report presented by City Manager Cary Keaten during the first day of budget reviews earlier this week.
In the same preliminary budget report, Keaten stated that with the coming fiscal year’s operating revenues at $12.5 million and actual operating costs at $13 million, the city will need to take out $540,000 from its reserves or savings account to balance the 2010-11 budget. That action, however, will present the city with the challenge of replacing that same amount back into the reserves by achieving “annual savings and other contractual concessions,” the city manager explained.
How to realize those cost savings and how to implement those “contractual concessions,” which could be either by more lay-offs or additional across-the-board salary cuts, are things that continue to be discussed between the council and city employees.
Should the city’s top brass take more pay cuts?
Before he resigned from the council in the spring, former council member Robert K. Oliver stated a number of times during council meeting discussions that he considered city hall employee salaries “still top heavy.” City hall critic Dan Doyle agreed and told the council at a recent meeting that paying 10 city employees more than $100,000 a year is just too much. However, another city critic and mayoral candidate J. Chaka Santos has also come on the record before the council saying he does not think the city’s management staff is being overpaid for the heavy work load that they do which has been compounded by the shrinking staff, and congratulated them for doing a good job under trying circumstances.
As recently as the last regular meeting on the first week of this month, the top management’s high salaries came under fire when members of the union employees (Service Employees International Union) asked the city to end the “costly abuse of the vacation cash-out privilege” enjoyed by the city’s top brass “while front-line city employees are being laid off and services to residents are being cut.”
According to the city’s web site, Lathrop paid a total of $65,814.97 in vacation buy-backs to 16 employees during the 2009-10 fiscal year.
Vacation cash outs
‘revenue neutral’
The city manager, however, explained that these cashed-out vacations are “revenue neutral to the city” because when an employee earns a vacation hour by working instead of taking time off, funds to pay for that work time is set aside in the employee’s “vacation bank” and is not used for anything else except for that purpose.‘revenue neutral’
“It is likely this issue came up at the City Council meeting because we are currently negotiating concessions with our represented employees,” Keaten said.
He added that steps being undertaken to solve the budget deficit is a universal effort that includes every city employee, from the top of the totem pole to the bottom rung.
“The city needs to save money and we are looking at many options to do so. No one is exempt. For example, the City Manager (me) volunteered to lead negotiation concessions with the City Council. These negotiations are not yet complete,” he said.
He did not say what those negotiation concessions actually entail, or if they involve talks on the top-heavy salaries of the city’s top brass as a way to trim the budget deficit and, at the same time, prevent any further lay-offs of rank-and-file employees.
