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Lathrop to lay off 10 more city workers
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City editor of the
Manteca (Calif.) Bulletin
LATHROP – The City of Lathrop has a problem.

It’s a $1.5 million problem.

And the worst is yet to come, even if a miraculous resurrection of the building industry happens in the city today. That kind of economic resuscitation would not come soon enough to rescue the fiscal abyss in which the city is finding itself.

It could mean City Hall may have to close some of its departments in the spring of 2011. Worst-case scenario, the city could go broke.

That’s why members of the Lathrop City Council will have to decide what some of them are describing as one of the worst decisions they’ll ever have to make as elected officials – laying off 10 more staff, including the Human Resources director and Parks and Recreation positions which are currently combined, to bridge the current $1.5 million budget deficit. They will deliberate on this recommendation by city staff and then vote on it during their regular meeting on Monday, March 1, at 7 p.m. in the Council Chambers at City Hall, 390 Towne Centre Drive.

If the council does not do anything about the proposed layoffs and decides to continue maintaining the current status quo, the city will go bankrupt in less than two and a half years, city officials are glumly admitting.

“The projections are not very good. But everybody is hurting, not just Lathrop. If we don’t do anything, our reserves will be depleted in two and a half years. The most important thing is, the city has to stay solvent,” said Council member Sonny Dhaliwal on Friday minutes before he had to meet with representatives of the Service Employees International Union (SEIU) over the proposed layoffs.

“We have no choice.  We just can’t, in good conscience, let the city go bankrupt. At the present rate, we’re going to run out of money in two and a half years. We’re living on our savings account, like some people are, and that goes only so far. These are really, really extreme measures,” Council member Robert Oliver said of the looming second round of layoffs for the city this fiscal year.

The reality for Lathrop, in plain figures, is this: The city’s revenue for fiscal year 2009-10 is $12.4 million. Expenses, with staff getting the lion’s share, add up to $13.9 million. That gives a negative balance of $1.5 million that the city needs to bridge in its current budget.

Lathrop started
out with $2.5M
budget deficit
The city actually started out with a $2.5 million deficit at the beginning of the 2009-10 fiscal year on July 1 last year. But in anticipation of that deficit, and so as not to raid the city’s general fund reserves, which is the city’s savings set aside during the building boom days, layoffs and furloughs were instituted. In May 2009, 10 employees were let go and five budgeted but unfilled positions were not funded. That whittled $1.3 million from the budget deficit.

Then in July 2009, the city implemented the Friday furlough program which resulted in closing City Hall every Friday and 10 percent salary cuts for all city employees. In January of this year, the city unfunded three positions in its Police Services department which meant three officers were returned to the Sheriff’s Office which is contracted to provide police staff. These budget-trimming actions in the second of the planned four-phase budget balancing course of action for the 2009-10 fiscal year, resulted in further reducing the budget deficit by $1.1 million.

All together, those budget-shortfall trimming actions represented a total $2.4 million in savings for the city or money that would not be taken away from the city’s reserves or savings.

But there’s still the budget shortfall of $1.5 million which makes it necessary for the city to further implement layoffs. By eliminating the 10 positions, which the council is being asked to ratify on Monday, the city would be able to reduce the budget deficit by another $840,000.

That would still leave another $660,000 that needed to be whittled down from the current $1.5 million deficit. Plans right now for that fourth phase of budget balancing this year is to achieve that through further negotiations with Police Services, the union, and if necessary, by closing some departments at City Hall in the spring of 2011.

Compounding the fiscal crisis for Lathrop this fiscal year was the state’s “confiscation” of the city’s $450,000 in property taxes, as Council member Oliver put it.

“I don’t know if the state will have a way to pay it back,” Oliver grimly stated.

“There’s no telling if we ever gonna get anything back (from the state),” Dhaliwal said just as grimly.

“That would have helped” the city’s budget crisis, he said of the money grab by the state into Lathrop’s property tax shares.

Dhaliwal has firsthand understanding of impact of layoffs
There are actually nine city employees who are losing their jobs; the 10th position is vacant and is being unfunded. The proposed layoffs will involve the following employees: junior engineer, assistant engineer, one administrative assistant II each in two departments, office assistant and accountant I in the finance department, all represented by SEIU; code compliance supervisor, chief utility operator, senior accountant, budget analyst II which is the vacant position; and the Human Resources director position.

Dhaliwal said making a decision on the proposed layoffs “will be one of the most difficult things” he has ever done as a councilman. He knows firsthand how difficult that is for people, especially for those with families, he said.

“I’m not only a council member but I’m a worker, too,” said Dhaliwal who works in the transportation department of Santa Clara County.

His wife also worked for Santa Clara County but was laid off several years ago. He’s never forgotten that moment when his wife received the pink slip and called to tell him the bad news.

“When my wife called me, she could not even talk; she had the pink slip in her hand,” said Dhaliwal.

The couple has four children – two who are now in college, and the younger two in elementary school.

His wife later found another job, which paid just a third of her former salary going from $27 an hour to $9 an hour.

“So I know how difficult it is” to be laid off, Dhaliwal said.