City’s Proposed Budget Avoids Lay-offs and Program Cuts

In the proposed 2011-2012 budget, city staff avoided any programmatic cuts or staff lay-offs, reported city manager Bob Bell at Monday night’s budget study session.

Bell credited the city’s three-pronged approach to reign in a budget deficit that is “significant, but manageable,” Finance Director Brian Ponty said. The deficit will be $2.7 million in 2011-12 and will increase to $4.8 million in 2012-13, $6.4 million in 2013-2014, then begin a slow decline to $6.3 million 2014-15.

The first prong was credited to all five Redwood City labor groups that would save $5.6 million over the next three years. Bell said the largest concession was on the health care contribution. Rather than allowing employees to cash out on un-used benefits, they are participating in a contribution sharing program.

“I’m really proud that we were the only city I know of that was able to come to agreement without imposing contracts or imposing arbitration,” Bell said.

Secondly, the city increased organizational efficiencies by identifying critical services then streamlining and combining certain functions.

Finally, the city has explored revenue possibilities, from offering services to other cities, like the with San Carlos that will net $750,000. The city is also looking into providing payroll services to San Carlos and has also explored to other cities.

The city council also hopes to pass the proposed that will appear on the November ballot. Each would generate $825,000 and $640,000, respectively, but both of these revenues were not calculated into the budget.

However, general fund revenues were “pretty flat, with no bounce in real estate prices,” reported Ponty. Almost two-thirds of the revenue comes from property and sales taxes, essentially people spending money. Ponty said consumer spending has been severely impacted as a result of the economy.

Concurrently, 80 percent of expenditures are spent on city employees, so reducing the deficit was heavily focused on reaching wage concessions with the labor groups.

Though no employees were laid off this year, the city has shed employees over the past few years. In 2002-2003, the city had a recent peak of around 600 employees and is now operating with 520 employees.

Councilmembers were interested in the new parking increase and how much revenue could be generated. In addition to looking at the new metering system, Councilmember Ian Bain suggested focusing on businesses that were moving to a new location and ensure that they were still staying within Redwood City borders.