City seeks to fill a $4.2M budget gap
Sandra Emerson, Staff Writer
Created: 08/13/2011 04:56:04 PM PDT

UPLAND – The City Council agreed Saturday to cut 15.5 city positions and reduce the reserve limit to 10 percent to address a $4.2 million budget gap.

The council approved cuts in expenditures and changes in projected revenues during a special meeting at City Hall.

“This is a work in progress, so what will happen is we will monitor the city’s finances very closely for the next few months,” said City Manager Stephen Dunn.

The council will revisit the budget early next year to either return funding to previously cut areas or make additional cuts, depending on the condition of the economy, he said.

The city’s workforce will decrease from 345.5 positions to 285.5 positions due to 20.5 unfilled positions being cut from the budget, 21 retiring employees, the loss of three department heads and 15.5 layoffs.

The reductions will save the city $3.4million in the general fund, which cuts the city’s labor force by 10percent.

The reductions will cost the city nearly $1.8 million in payroll costs, retirement incentives, leave payouts and unemployment benefits.

The rest of the cuts will be reached through an increase in projected revenue, such as sales tax, sale of city assets, interest earnings and fire inspection fees.

Expenditures in the vehicle replacement fund, maintenance and operations as well as personnel were reduced. Cuts will be made in materials, supplies, conferences and training as well as building maintenance. Projected legal service costs will be reduced by $338,000, which Dunn says is optimistic.

The city’s reserve limit will be 10percent of the general fund budget, reducing the fund from $7.1 million to $4.3 million, “which is still considered healthy for a city,” Dunn said. “We don’t really want to go much further below.”

The council in June approved to take $1.5 million in one-time costs from the reserves to address legal costs, the City Council special election and transfers to the animal shelter.

They also approved the budget with $3.1 million in needed cuts. The number has since increased to $4.2 million due to a loss of vehicle license fees to the state, a change in projected overtime costs and a loss in matching funds.

In June, Dunn combined six city departments into three and laid off three department heads.

As a result, part-time position funding will be increased by nearly $160,000.

The city is facing several costs in the future including pension costs, which will increase from $7.5 million to $9 million in two years. The employment contract with Upland police personnel will cost the city nearly $1.6 million by June 30, 2013. Three employee groups are also preparing to negotiate salary and benefits with the city, Dunn said.

Department directors addressed the council on what the impact of the cuts would have on city services.

The consensus among department heads was that services will be reduced or slowed down due to the reductions.

“We need to identify the list of services that we’re providing that we would consider the top priority and do our best not to show a reduction in services,” Dunn said.

Dunn said staff did their best not to touch lower level employees during the budget reduction process.

“We were very conscientious about trying to keep the worker bees out there working and not take these financial situations out on them,” Dunn said.

The Public Works department will lose 12 employees to layoffs, which is the most of any department.

Acquanetta Warren, the city’s deputy public works director, said the department’s obligation to fulfill state required mandates will be impacted as well as the ability for employees to provide services in a timely manner, such as cleanup after a storm.

“We pride ourself in trying to clean up the city usually in 36 hours, depending on the impact of the storm,” Warren said. “We will not be able to continue that same 36 hours, but we at the same time will get the city cleaned up.”

Public works will be reduced to 55 employees from 77 due to the layoffs, early retirement and reorganization.

Administrative Services – which includes the City Clerk’s Office, finance, human resources, information technology, risk management and purchasing – will lose seven positions, including one layoff, four retirements, one lost to reorganization and one unfilled position.

Stephanie Mendenhall, the city’s administrative services director and city clerk, said the reorganization has affected employee morale, and the new cuts will have a similar impact.

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