City employees face deadline
City Manager Bill Workman has two plans to balance the city’s $99 million budget in the face of a $7 million dollar shortfall.
Plan A would cut about $3.7 million from various programs and services and require another $3.3 in voluntary wage concessions from city employees.
But if the city’s employee unions don’t agree to concessions – an across-the-board six percent cut for the second year in row, as well as a forgoing of cost of living increases – then the cuts will come directly in the form of people. Plan B would lay off 35 employees additional to the two layoffs already proposed.
“It’s a retrenchment budget, where we are going to provide less service and have fewer employees in year based on your actions,” Workman told the City Council Tuesday night. “….If we don’t have concessions, we are going to have more layoffs – that way we can get a balanced budget.”
Workman said he hopes to have agreements in place with employee unions by Friday or else he will propose the additional layoffs.
Mayor Mike Gin called the budget “probably the toughest we’ve ever seen.” He thanked employees for their sacrifices and urged them to help the city balance its budget again with minimal layoffs.
“We have asked a lot of you this past year and we are asking again to be able to continue these concessions in order to really balance this budget and reduce the possibility of additional layoffs,” Gin said.
Councilman Pat Aust said he’d witnessed 43 city budgets and this was the most difficult.
“There are some really hard times coming down,” Aust said. “We are going to have to make some real tough decisions, and the employees are going to have to make some real tough decisions in the coming days.”
Aust also directed some tough words at the operators of Seaside Ice, the private company that for the last two years has run a skating rink at Seaside Lagoon. The company has run into financial difficulties and has recently requested that the city release it from some of its financial obligations. Aust strongly argued against it in light of the city’s fiscal plight and asked the City Attorney to explore potential breach of contract.
“I cannot in good conscience ask people to give up salary and make concessions and possibly vote to have us go with Plan B and lay 35 people off and then sit here and talk about making a contribution to keep a private company afloat in the harbor,” Aust said.
The city paid $147,000 for electrical upgrades to the Seaside Lagoon in order to make it possible to freeze water into an ice rink. According to city staff, Seaside Ice agreed to pay $50,000 of those costs over five years in addition to rental fees for the facility; the company currently owes the city $27,000 towards those upgrades according to the terms of its contract with the city and another $4,000 in rent.
Councilman Bill Brand suggested the city could compromise on rent for two years but not the electrical costs.
“Since nothing is going on down there this time of the year I’m willing to forgo $8,000 in rent so they can operate, but I am not going to be on the hock for electrical costs for this year and last year,” Brand said.
Councilman Steve Aspel disagreed with any subsidies.
“If we were to subsidize a business down there, we may as well subsidize Tony’s on the Pier,” Aspel said.
Councilman Matt Kilroy said that Seaside Ice provided a nice amenity for the city and should be encouraged to continue so long as it lives up to its contract.
“I don’t want to send a message to the sponsors of Seaside Ice that it is over and done with,” Kilroy said. “Nevertheless, I agree they need to become current.”
Gin suggested that the city consider some of the other financial impacts of Seaside Ice, such as how much hotel and restaurant business are generated by the rink’s operation. Councilman Steve Diels defended the business.
“Seaside Ice has been an attempt to bring an amenity to an underused facility that we have been working very hard as a council to preserve,” Diels said. “So it’s not analogous to subsidizing a private business. It’s not a gift of public funds. It is an attempt to promote our city with something outside the box.”
The Council will revisit budgetary matters next Tuesday and most likely adopt a budget. Aspel urged employees to come to the table with a concession agreement.
“Every business out there is taking a hit,” Aspel said. “You talk to anybody in private industry and it’s down, unless you are a repo officer, then it’s up. But I don’t want to see any layoffs. Everybody just has to suck it up. It’s hard because the employees are our friends….You hate to be the ogre that takes all the money. That is just the facts of life.” ER