LATHROP – If Lathrop were a patient and its budget woes the fatal diagnosed disease, it would be dead in four and a half months if it doesn’t get the necessary and immediate life-saving cure.
To keep the city’s fiscal health in the pink for as long as possible in the desperate hope a miraculous economic turn-around comes to the rescue, city leaders have to make the difficult decision of laying off employees. Furloughs, or cutting off staff work hours which could mean shorter business hours at City Hall, could soon follow as well as the reduction of police services. And there could be even more layoffs after that if the anticipated $2.5 million deficit is still not bridged.
But for phase one in what city leaders are calling their five-year survival plan, 15 positions are on the chopping block – five of them are vacant positions but have been budgeted. That proposal from city management staff will be considered then voted on by the City Council at a special meeting Wednesday, May 13, at City Hall, 390 Towne Centre Drive. The meeting will begin with a closed session at 5 p.m. and then the council will come out and discuss in open session the implementation of these cost-cutting measures followed by a vote.
Here are the stark fiscal scenarios facing Lathrop under its 5-year survival plan:
•If it does nothing now and not eliminate any position, it will start fiscal year 2010 with a $2,462,937 deficit. In five years, that deficit would be a whopping $17,525,560.
•If it eliminates only the budgeted vacant positions, fiscal year 2010 would start off with just $686,006 in the red.
•With the elimination of all the vacant positions and the implementation of the first phase of layoffs with 10 city workers laid off, the city would see a deficit happening at the beginning of fiscal year, or two years from now, of $1,904-528.
•Phase one layoffs plus 10 percent furloughs in Phase 2 would reduce the deficit in 2011 down to $333,594.
•Layoffs plus furloughs plus cost savings expected to come from savings in negotiated police services with the San Joaquin County Sheriff’s office would see a deficit coming in five years at just under $1 million or $990,540.
The city is still continuing its negotiations with the Sheriff’s office as to what part of police services will be cut off, if any.
With the reduced manpower, some positions will be consolidated. For example, the Human Resources and Parks and Recreation director positions will be merged with just one person overseeing the consolidated responsibilities. This is actually what has been going on for close to a year with Human Resources Director Katie Lemons wearing both hats, plus that of Animal Services head and city clerk at one time in the past few months.
Laying off 10 city workers plus the unfilled but budgeted positions alone would save the city a total of $1.3 million each year, according to the report prepared by staff for council to consider at the closed meeting Wednesday.
Management staff was also careful that this elimination of positions be equally distributed among union-represented staff and those who are unrepresented. Of the $1.3 million savings anticipated from the Phase 1 layoff plan, $0.66 million and $0.68 million are represented and unrepresented positions, respectively.
According to staff’s report, the balance in the city’s general fund by the end of the current fiscal year is estimated to be at $6.5 million; the estimated decrease in the general fund’s balance in the same year is estimated at $2.4 million.
“As a measure of the general fund’s liquidity, it may be useful to compare total fund balance to total fund expenditures,” the staff explained in the report.
“Total fund balance represents 37 percent of total general fund expenditures of $17.3 million in 2009. This means the city’s general governmental operations could continue for over 4.5 months without any additional revenue generation.”
Simply relying on the city’s $6.5 million general fund reserve will not be enough for the city to survive for the next five years under present economic conditions, staff added.
To contact Rose Albano Risso, e-mail email@example.com or call (209) 249-3536.