San Luis Obispo employees will be asked to forgo $2.6 million in salary and compensation to help balance the city’s budget — $500,000 more than first proposed by city staff.
Those reductions, in addition to $1.8 million in operating cuts, are outlined in the city’s draft two-year 2011-13 budget, released Friday. The cuts eliminate 13 jobs, reduce training opportunities for most employees and will likely cause delays in some city services, such as the review of building permits.
Most of the 13 positions being cut — saving $1 million — are vacant now or are expected to be soon because of retirement or transfers, including two police officer positions.
The proposed cuts to employee compensation grew from the $2.1 million originally proposed by staff to $2.6 million to make up for an assortment of requests made by the City Council at its first budget hearing in April.
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The city faces a $4.4 million shortfall in its $54 million annual general fund for the fiscal year 2011-12 that begins July 1. That shortfall will grow to $5 million in 2013-14 and is projected to be $4.7 million annually for each of the next five years.
Among the changes initiated by the council in April was the addition of two full-time positions and one part-time position for neighborhood services specialists at a cost of $156,200 in 2011-12 and $205,000 in 2012-13.
Those jobs were created to deal with nuisances such as noise, cars parked in front yards, excess trash and debris in yards, and illegally converted living spaces.
The council rejected a proposal to charge residents for street sweeping and restored funding that was proposed to be cut for the city’s visitor center and the promotional coordinating committee. It also returned to the budget the cost of repairing the steps leading up to City Hall.
Employees will be asked to make concessions by paying more for their retirement and health insurance and working for less pay. Those changes must be negotiated with employee groups. The city expects to begin those talks in the fall.
City Manager Katie Lichtig would not speculate on what would happen if those talks failed to net the needed savings, saying that only two choices would remain: to increase revenues or to cut more from the city’s operating costs.
“Because our focus has been on what a sustainable financial future is for the city, we know we have a target that we can take to employees and work through together,” Lichtig said. “When it comes to achieving that objective together, there is a vast array of solutions to be considered.”
Employee costs account for 79 percent of the city’s general fund. The proposed changes would drop that to 73 percent by the second year of the budget.
The next budget workshop will be at 4 p.m. June 2 at the Council Chambers, 990 Palm St.
Additional budget workshops will be June 9 to discuss capital improvement projects and June 14 to discuss enterprise fund operating programs such as water, parking and transit. Final adoption of the 2011-13 budget is expected to be June 21.
The budget documents are available online at www.slocity.org/finance/finplan.asp.