The City of Redondo Beach will go right up to its legal budget deadline after scheduling a special City Council meeting Thursday night. Two of the city’s seven employee unions have yet to agree to wage concessions necessary to meet an ongoing budget shortfall.
The Redondo Beach Unified School District Board of Education, meanwhile, adopted a budget Tuesday night that will almost surely be revised within a month or two and possibly entirely overhauled later in the year, in light of the state’s ongoing budget gymnastics.
Sources familiar with the employee contract negotiations say that the city is bargaining to make permanent the six percent wage concession employees have agreed to for the past two years, in addition to forgoing a four percent increase that was scheduled. In effect, employees thereby face a permanent ten percent pay cut that will also reduce their retirement benefits.
City Manager Bill Workman on Tuesday night told the Council that the city is near an impasse with its Teamsters union, meaning the city may impose a new contract after the June 30 expiration of the current contract. In an interview following the council meeting, Workman said the gap between the city and Teamsters is wider than with any of its other unions. He also acknowledged that permanent cuts are on the table.
“We are having to look at restructuring,” Workman said.
Workman cited state budget takeaways, a projected $3.7 million increase in the city’s contribution to the California Public Employee Retirement System (CalPERS) over the next four years, and a recent UCLA report on the regional economy titled “No Recovery In Sight” that predicts no significant growth until at least 2013 as reasons for the city’s dire financial outlook.
The city faces a budget shortfall this year of $3.8 million, largely due to flat or declining tax revenues and increased costs. The overall city budget is $98 million. Workman proposes to balance the budget through $2.8 million in savings from the employees’ wage concessions and by pulling $1 million from a $2.5 million “set-aside” fund previously established by the Council in order to meet the city’s increasingly large CalPERS contributions.
Councilman Pat Aust, a city employee for four decades, said this was the most difficult budget in recent history.
“It’s the toughest I’ve seen in 43 years,” Aust said. “Thanks to the employees for coming forward and recognizing where we are at and the problems we are facing. We are getting attacked from all sides in this budget. I think we’ve had a unified camp, so to speak – they haven’t been able to break the lines yet.”
The RBUSD school board unanimously approved a budget but openly acknowledged it did so only to meet its legal requirements. School board member Laura Emdee called it “a pretend budget,” given the fact that the district is almost entirely dependent on state-controlled revenues and the California legislature has once again gone beyond its legal deadline for adopting a budget.
The district once again had to adopt its own budget without a clear idea of how much money the state will allocate towards education. Governor Jerry Brown vetoed the legislature’s proposed budget on June 16. The legislature was still negotiating as the school board adopted its budget (a deal was eventually reached Wednesday morning).
“We spend a lot of time, all of us do, developing this budget, only to have the assumptions change the very day you bring this budget to the board for adoption,” said Janet Redella, the district’s chief business official. “So to say it is not frustrating would be a lie. It is.”
“There will definitely be budget adjustments coming forward this summer,” Redella added. “I’m sure we’ll have some at the end of July, and probably again at the end of August.” ER
