City Facing Budget Pinch — but Needs to Fill Some Staff Vacancies

The El Cerrito City Council spent three hours Tuesday night examining the city's finances and seeking ways to minimize the pain of dealing with anticipated losses of revenue while at the same time filling at least some of the vacancies in city staff.

A marathon budget workshop began with City Manager Scott Hanin delivering relatively good news about the budget for the current 2012-2013 fiscal year ending June 30.

"All things considered, we're doing fine," he said, noting that the budget remains more or less balanced.

However, as staff prepares a proposed budget for next fiscal year, it asked the council for general direction on how to deal with anticipated funding shortages and the current high number of staff vacancies.

The city has managed to get by in recent years with 10-12 vacancies, Hanin said. But that number has climbed sharply recently and now stands at 27, he said, adding that he believes vacancies in the 20-25 range is not sustainable. A primary reason for the increase in empty positions was a wave of retirements prompted by the city's cost-saving offer of two years' retirement bonus for early retirement, he said.

The city's largest department, police, shows 50 positions currently filled out of the authorized strength of 56.55, according to a budget slide presentation prepared by staff for the council meeting.

One area that needs examining is the city's policy of paying employees the "median" salary among comparable nearby cities, particularly with regard to police, he said, adding that El Cerrito is experiencing "trouble retaining and recruiting officers."

The great bulk of the city's $29 million general fund budget is the $22.9 million in personnel costs, and the city is being squeezed especially by the rapidly rising costs of employee pensions and health insurance, Hanin said.

The employee pension expenditure in the budget has risen to $5.4 million from $2.6 million in nine years, with further hefty increases expected, he said. The healthcare cost is now $3.3 million, up from $2.6 million in the same period and is expected to keep rising at about 10 percent a year, he said.

Hanin said the city has no expendable programs or services it can cut, except perhaps community events like the July 4th Festival and the long-running Martin Luther King Jr. Parade.

He said cutting such events – which cost about $30,000 a year – would have minimal impact on balancing the budget, and the events generate a large amount of goodwill. Yet, at the same time, he said, cutting them would be "a very visible way to send a message that things are tight."

Council members indicated they would be opposed to eliminating the July 4th festival and King parade but urged the staff to look for ways to trim the city's expenses in sponsoring them.

"We're facing brutal facts," Councilwoman Rebecca Benassini said, referring to an anticipated loss next year of about $1.2 million received this year in sales tax and revenues related to the city's dissolved Redevelopment Agency.

The council also expressed a wish to maintain a balanced budget and to try to keep a reserve fund, currently just under 10 percent, with the ultimate goal of reaching 15 percent. On vacancies, some members of the council suggested looking at consolidating or eliminating some job positions.

Hanin said the staff will also seek input from the city's Financial Advisory Board before returning to the council with the proposed budget for next year.

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