Government

City’s best scenario: cuts of $12.5 million

City Manager Phil Kamlarz: "tough decisions"

Some of the scale of the budget difficulties face by the City of Berkeley was painted graphically at a special session of the City Council last night. The city faces a deficit of $3 million in its general fund and $9.5 million in its special funds that could require the elimination of 96 positions over the next two years.

“These are tough decisions and they don’t come easily,” said City Manager Phil Kamlarz, introducing the discussion. City Budget Manager Teresa Berkeley-Simmons described the pressure on the city from shrinking state and federal budgets as “staggering”.

Berkeley-Simmons presented balancing measures that call for eliminating 60 positions in fiscal year 2012 and a further 36 position in FY2013 (see chart). Fifty of those position are currently filled; the remainder are vacant positions that will not be filled. The bulk of cuts in the plan fall on health services and housing, where 17 filled positions as well as a further 17 vacant positions would be cut in FT2012. In FY2013, the bulk of the cuts outlined fall on public works, largely through a plan to move much of the refuse service to one-person trucks.

Police chief Michael Meehan discussed the impact of reducing sworn officer numbers by five in each of the next two years and similar reductions in the police department’s professional staff. Meehan pointed out that 92% of the poice budget goes to personnel costs.

Housing and community services director Jane Micallef and health services director Beth Myerson outlined the service cuts that could be expected in their departments with the staff reductions. Micallef said the city’s weatherization program would be eliminated, administration would be restructured and aging services would be reorganized, including ending the West Berkeley Senior Center’s role as a daily center. Myerson discussed reductions in high intensity supports in mental health, cutting back the opening days for the public health clinic, and limiting communicable disease controls to the highest-risk diseases.

As difficult as these cuts seem, Berkeley-Simmons and Kamlarz stressed that they were presenting the best possible scenario for the city. It assumes state cuts don’t increase beyond Governor Jerry Brown’s current proposals, but the mooted June ballot measure to extend taxes remains in the political balance. Further, in areas such as housing where the city receives federal funding, the assumption is that President Barack Obama’s cuts — of 7.5% on community block grants, for example — will prevail rather than the 62% cut proposed by Republicans in the House of Representatives.

Kamlarz said that depending on what happens at the state and federal level, the final budget proposals presented to the council on May 3 might be very different.

“You’re trying to inoculate us slowly rather than bringing the worst possible scenario,” said Councilmember Laurie Capitelli. “I hope the situation doesn’t get grimmer.”

Capitelli and other councilmembers said that they hoped there were ways to generate savings without having to resort to layoffs in the city. The number of city employees has already been reduced by 130 between FY2009 and this year.

Councilmember Kriss Worthington stressed the importance of city management working cooperatively with employees and the unions to resolve the budget problems. He suggested that in future budget presentations, union and employees should sit at the “front table” together — “it’s a statement of respect and inclusion”, he said to applause.

“We really need to strengthen that partnership,” Worthington said. “The reality is the public is going to suffer and the employees are going to suffer. Figuring out a fair way to balance this is going to be critical.”

Councilmember Linda Maio also emphasized the importance of cooperation between management and employees in solving the budget.

“I don’t want to issue a layoff notice to one single family, one single person,” Maio said. “We have to have you work with us. We need good negotations. We’re in this together.”

Councilmember Gordon Wozniak echoed the desire to minimize or eliminate mandatory layoffs. He suggested a salary freeze in the city on top of the hiring freeze and a cap on termination payouts. He also thought healthcare costs could be an area for targeting.

“Berkeley has some very generous plans with no deductibles and no premiums and we have to look at what we could save by doing things like that,” Wozniak said.

Mayor Tom Bates said the one consolation in the bleak budget picture was the amount of time available for discussing and arriving at solutions before the planned June passage of the budget.

“These things are not sustainable,” he said, citing pension and healthcare costs. “It’s not going to be nice, it’s not going to be pleasant, it’s not going to be fun.”

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  • laura menard

    Charlie Rose program last night’s was a mayors round table discussing city operations in today’s economy, these mayors have already confronted many of the budget challenges by reducing the size of municipal government, renegotiation of employee benefits and pensions, and improving employment in the community. It was a stark contrast to the fiddling of the Berkeley city council.

  • City of Berkeley has blinders on

    Most Berkeley residents would rather see city employees paying towards employee retirement and health costs and see a higher age for retirement. Yet we hear solutions like losing police officers, and fewer and further deteriorating services. Call me crazy, but I believe the City of Berkeley should be serving the residents. It seems the council sees it’s job more as serving the city employees.
    Wozniak has good ideas, too bad there is lack of political will among the rest of council who want to protect their gravy train.

  • Sharkey

    It *does* seem a bit odd that the solution is always cutting jobs, instead of keeping the same number of employees and cutting pay/benefits.

    One thing the City of Berkeley & State of California are doing right now is going after money for permits & “filing fees” like mad. I’ve been getting double-dipping from the city for permitting & filing fees on work I’m having done on my house, and I know that’s money I won’t be getting back.

  • GPO

    When dealing with union contracts, any reductions in salary levels or benefits requires renegotiation of contracts. Legally, the city cannot reduce these contractual obligations by fiat, even if it makes sense to do so.

    Unions, both private and public, have long prefered layoffs to any reduction in salaries or benefits or other worker rights. In fact, in some industries, rather than accept some type of more competitive salary and benefits structure in competition with the “global economy”, some unions have prefered to see whole domestic industries collapse rather than accept some reduced benefits.

    Expect the same from our public employees and their unions in Berkeley. Bankruptcy will be the only method of breaking this stranglehold in conjunction with new political leadership which renegotiates more sustainable salaries and benefits.

    We hear so much in Berkeley about “sustainability” and “sustainable growth”, about reducing carbon emissions far in the future back to 1990s levels and so forth. The same basic *concept* should inform our public discourse about the salaries and benefits of city workers and management. Just like with wasteful energy consumption, we need to conserve and reduce the amount of salary “pollution” which our city generates for the benefit of future residents and generations of Berkeleyians.

  • Bruce Love

    Sigh.

    Council does not have unilateral power to alter labor agreements. To an extent, the choice between layoffs and reductions in compensation belongs to the various unions’. That’s why Worthington made the remark about bringing them to the table. That’s why Maio remarked “I don’t want to issue a layoff notice to one single family, one single person,” Maio said. “We have to have you work with us. We need good negotations. We’re in this together.”

  • Deb

    Not even addressing pensions? Hmmm. Major cuts to health services, but that’s all good as long as the city Manager gets his 250K salary and benefits. Not exactly painful for the manager, is it?

  • Sharkey

    @ Bruce — That doesn’t change the fact that the Council & City seem to just be ignoring the option of convincing the Unions to renegotiate contracts. It might not be easy, but simply changing the dialogue to asking the Unions for concessions first and then suggesting job cuts only as a second option would change the discussion.

  • Bruce Love

    @Sharkey, re: “That doesn’t change the fact that the Council & City seem to just be ignoring the option of convincing the Unions to renegotiate contracts.”

    You might want to read the article more carefully.

  • Sharkey

    I read the article, Bruce. I guess I’m tired of hearing whining and hand-wringing and would like to see some concrete numbers RE: Union concessions.

    I’d like to see it posted as “Here is what the Union workers would have to concede, OR here is a list of job cuts we would have to make” rather than a list of job cuts and then vague comments about “working together.”

  • James

    A large portion of the cities budget goes to paying for Police–specifically their overtime and pensions to retired officers. There are too many officers in Berkeley as it is, we don’t need 4 cop cars to take away one homeless man.

  • Iceland_1622

    The City *should*, along with a coalition of many other American Cities, be suing the Federal Government and the Corporate Criminals on Wall Street who ripped us all off, gorged themselves on our tax money after that episode, and then gave themselves bonuses, and left the rest of us all fighting over the crumbs and leftovers in our fractured and quickly devolving society or what is left of it. The potholes in Berkeley are only going to get worse now. If you doubt try the ones northbound at the entrance to the Gillman Street on-ramp to I-80. Talk about surreal and ugly.

  • dave

    I am shocked and appalled that there are people in Berkeley that are so narrow sighted as to state – with an ignorant confidence – that public employees in this country are to blame for the fiscal crisis that we’re in the midst of. PEOPLE, are we in Wisconsin or Ohio here? C’mon, lets remain focused on the root cause of this national collapse, corporate greed! Do I need to go in to more details, happy to if necessary!

    There is no doubt that the landscape has been permanently altered by what’s happened in the real estate market, wall street, etc. All of us, at every level in this country (national, state and local) will have to make some big adjustments. This means changes to the salary, benefits and working conditions of employees, (citizens) accepting decreased services and politicians doing a better job of prioritizing core City services and halting all fringe or “nice to have” programs. All these things will happen, wether they are forced or collaboratively achieved.

    The last thing we need to do is begin to pull apart at the seams. Public employees, whether you pick up the trash, respond to fires or keep us safe are middle class citizens, just like you and I. And this City, of all Cities should never turn its back or criticize the salary and benefits of its hard working public employees. For those who argue that a salary of close to 100k is unsustainable, I ask you one question: how would a public employee be able to afford to live in or around our City if they make less? Where did this arbitrary salary glass ceiling come from? I want the best public employees working in my City and i’m willing to pay for it. I want my firefighters and police officers to live here, in fact, i want all public employees to live here. You get a more committed and productive employee if their family and friends reside in the City they are employed by.

    I agree 100% that this economy will force all departments, along with their employees to alter the way they perform work, reductions will have to be made…maybe even in terms of the # of employees we have in our City, efficiencies will have to be implemented and increased employee contributions to benefits will have to be negotiated.

    I’m on a rant here, but this really ticks me off. Here are a few pension facts that everyone needs to ponder:

    1 – Berkeley employees already contribute to their pensions, 9%….allot more than many surrounding Cities. All of them will be asked to contribute more in negotiations an i’m sure they will agree. The state pension system has suffered massive losses secondary to the real estate/wall street greed/collapse.

    2 – Private employees should demand the benefits public employees have. Corporate american is fleecing their pockets. When private industry abandons pensions, it only fattens the corporate bottom lines, not workers’ retirement. Privatizing retirement has left millions without any retirement security, while corporate salaries have skyrocketed. It’s time every employee had the right to a secure pension … public and private sector.

    3 – Although touted as the “easy fix” by the right wing, pension “reform” has many facets…many of which will have little to no effect on the current budget as they can’t be implemented except in the case of new hired employees. Did you know that if we completely eliminated defined benefit pensions in California that the State would still be 16 million in the hole?! Don’t let the rhetoric fool you, do your own research, pensions are not the biggest problem. I agree that we need to reform pensions, we need caps, we need to close the loop holes on spiking, these things have to happen.

    4 – Prop 13 is still a major contributing factor in California. Don’t you forget it! Although Berkeley’s property taxes are actually on par with Albany and Oakland, its still infuriating that I am paying over 6,000 in taxes for a 400,000 home.

    5 – Go Gov Brown, get rid of redevelopment. Its a broken and abused program that has segregated millions in local funding from core city services. REMEMBER folks, General Funds and taxes were originally established to pay for core or essential city services; reducing crime, responding to fires and medical emergencies, paving our streets and maintaing our parks. If we have to get back to those and those alone, so be it. The days of providing a full service government are gone, and so with it some of our employees. Maintaining current levels of staffing in the CIty and adjusting the salary or benefits of all others will not be a permanent fix and will yield a host of other problems. We have to make some drastic changes here if we are going to avoid greater fiscal challenges.

    Citizens of Berkeley, keep your heads screwed on straight. Our public employees are not the villans here, please don’t jump on that band wagon. The City and organized labor in this City have some tough negotiations ahead of them. There will be major changes in salary, benefits and deliverables to all of us who rely on them. Angry mobs in Council Chambers or angry posts vilifying individuals or casting stones without all the facts will not help the situation……just rely on that time tested phrase your parents taught you; “if you don’t have anything nice to say………”.

    Dennis Leary…..out.

  • Bruce Love

    I’d like to see it posted as “Here is what the Union workers would have to concede, OR here is a list of job cuts we would have to make” rather than a list of job cuts and then vague comments about “working together.”

    These are the “best case” numbers and, really, nobody believes that the necessary cuts will be that small. They’ll have a somewhat better idea in a few weeks.

    What you are suggesting is that the politicians should, today, take a stance like “Hey, union’s, I think you should cut your compensation by amount X!” and then in a few weeks, after the unions express either dissatisfaction or agreement, having to turn around and say “Oops! I meant X + 100!” Only, maybe it isn’t 100. Maybe it’s 1000 or maybe its 10 or 0 or 10000.

  • Sharkey

    @ Dave — INDIVIDUAL greed played a huge part in it as well. Greedy people buying more house than they could afford on the assumption they could flip it, greedy Realtors over-inflating the housing bubble, etc. There’s tons of blame to throw around.

    But even if we hadn’t hit the recession we’re in now, the unfunded benefits problem would have eventually come back to bite us.

    “For those who argue that a salary of close to 100k is unsustainable, I ask you one question: how would a public employee be able to afford to live in or around our City if they make less?”

    The same way everyone else in the Bay Area does.
    $100k is higher than the median Bay Area salary, not to mention the pension benefits that many public employees have.
    How is it that private sector employees are able to do it but public sector employees can’t?

  • s.z. underwood

    @ Dave. I am personally aquainted with about two dozen city employees, about half of them either current or recently retired PD or fire. Not one of them lives in Berkeley. The reason is not “affordability, by any means. According to a 2009 database of City employee salaries, 477 city employees in Berkeley cleared more than $100,000 just in salary and that excludes benefits costs the tax payers need to pick up for them which often adds another $25,000 or more to their net income.

    Some city employee couples clear over $250,000 per year combined income and with so little out of pocket expenses are living very high on the hog. These are not middle class salaries! As you naively (or more likely self-interestedly) champion bloated salaries for city employees, many of those city employees I know who choose to live in Brentwood, Hercules or Pinole so they can buy a 4,000 + square ft. house on a city of Berkeley salary will be glad to know that you want them to be able to “buy and live in Berkeley”…

  • lifelongberkeleyan

    A thought for pioneering Berkeley:

    With no draft, tens of thousands of bright young men and women train to peak physical condition while acquiring sophisticated technical skills, all for the honor of being shot at or blown up somewhere far from home every day. Their pay, in the context of the risks, is ridiculous.

    What if they had other options for public service (say, EMT, fire, police, prison guard) where they were almost never shot at or nearly blown up, could live in the US and when they retired after four years they were sent to college.

    It’s seems we’d get more alert service, pay less for it, while investing in our country’s future and more fairly distributing opportunity across society.

  • Sharkey

    That’s a great suggestion, lifelongberkeleyan! It might be impossible to implement as a result of too may stodgy public unions, but it would be a very interesting experiment. Something along the lines of the V.I.S.T.A. program, but for City-level public service.

    18 year old kids fresh out of high school wouldn’t be able to have the same expertise and abilities as people who had trained for a job for a while, but it seems like there are a lot of jobs out there that they *could* do that would save the government money and give the kids some great real-world job experience.

  • lifelongberkeleyan

    Why does this photo of Mr. Kalmarz have a remarkable resemblance to Super Mario?

  • Bruce Love

    Well, with the tax measures not going on a June ballot — now, as they say, “stuff”‘s about to get real.