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City budget crisis: Past, present and future

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The city’s current budget gap of $39 million is grim. But the city’s financial situation is even more dismal when examined in the context of its budget cuts in recent years.

The city has laid off about 215 employees since February 2008, according to city spokeswoman Amy Williams. In addition, the city has taken 900 positions off its books since the 2008/2009 fiscal year and cannot hire employees for those spots, according to the city budget document. The city currently has 4,576 employee positions, Williams said.

Interim City Manager Bill Edgar and Interim Deputy City Manager Betty Masuoka are recommending the City Council approve an $812 million budget for the 2011/2012 fiscal year. Of that amount, $362 million would be the general fund.

The city defines the general fund, consisting of taxes and fees, as its main fund for operations.

The City Council is now weighing whether to lay off hundreds of city employees in the next few weeks. 

Mayor Kevin Johnson was visibly distressed Tuesday night after Masuoka briefed the City Council on the budget cuts and layoffs suggested by the city manager’s office.

“Those brutal facts gave me a headache,” Johnson said. “We’re talking about laying off a lot of people. And that just doesn’t feel good for any of us.”

Edgar explains in the budget document why the city has a $39 million gap. Because the city is still in a recession, sales tax revenues are likely to stay flat, and property tax revenues are down, the budget document says.

Labor costs have risen due to union contracts, new Fire Department staff in Natomas and mandatory retirement payments for employees, according to the document.

And, the city must keep its vehicles in working condition and replace old public safety machinery such as ambulances and defibrillators, all of which costs money, the document states.

City employees from various departments could be laid off, including 80 cops.

Police officers have been shielded from layoffs for decades: No officers were laid off during Sacramento City Councilman Darrell Fong’s 30-year career with the Police Department, Fong said last week. He retired from the department in 2009.

Even though the department has not faced layoffs of cops, the number of positions has shrunk in recent years.

“We had 804 officers in 2007 and 704 in 2010,” police spokeswoman Laura Peck said.

The city currently has 701 sworn police officers.

Johnson said Tuesday that he wants to learn more about the context of the cuts in recent years. He asked staff to present information soon on the following questions:

“How much have we cut from our general fund over the last four years?” Johnson asked city staff. “And then, secondly, how has that impacted job reduction over that period of time? I’m just interested because that time period has been brutal for our community.”

The Sacramento Press will report on city staff’s answers to Johnson’s questions when the information becomes available.

On top of its past and current woes, the immediate future for Sacramento’s city government does not look bright.

City officials project in the budget document that the city will continue to face budget gaps until fiscal year 2015/2016. The gap for fiscal year 2012/2013 is $11.7 million and is expected to rise to $22.9 million in fiscal year 2013/2014.

In fiscal year 2014/2015, the city expects to be $18 million in the hole. The gap drops to a $13 million deficit predicted in fiscal year 2015/2016.

“Given the lack of any significant revenue growth in the forecast, the current level of annual expenditure is not sustainable,” according to the budget document.

Still, the discussion of the current $39 million gap is continuing, and it’s possible that council members could find ways to prevent some cuts.

For example, Council members Kevin McCarty, Darrell Fong and Angelique Ashby all said they like the idea of seeing whether the city could move the public safety headquarters from Freeport Boulevard to the city’s Richards Boulevard location. The city has extra space at its Richards Boulevard building, Fong said.

Moving public safety workers to Richards Boulevard could save the city an estimated $800,000 – $900,000 per year in energy savings and maintenance costs, Fong said, referring to an estimate from the Police Department.

The Freeport building is not energy-efficient, he said.

City leaders need to look for “creative options to save a few bucks,” McCarty said.

Read a list of all the upcoming city budget hearings here.

Kathleen Haley is a staff reporter for The Sacramento Press. 

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