July 6, 2010 > City staff and elected officials help balance budget
City staff and elected officials help balance budget
By Simon Wong
The City of Hayward conservatively estimates budget deficits of $9.8M for FY 2011 and $8.9M for FY 2012 due to continued declines in sales tax, property tax, property transfer tax, development revenues and vehicle license fees.
Personnel costs account for 80 percent of General Fund expenditure. Reductions of such costs, the use of reserves and other actions are necessary to achieve balanced budgets in FY 2011 and FY 2012. Employee bargaining units, unrepresented management employees and the Council-appointed City Manager, City Attorney and City Clerk have agreed to concessions.
These equate to approximately five percent of General Fund employee-service costs, or approximately $4.5M (FY 2011) and $4.7M (FY 2012). An additional $950,000 (FY 2011) and $960,000 (FY 2012) of non-General Fund salary-savings will be achieved in operations such as Water and Wastewater and Redevelopment Agency.
Cost-saving measures by Police and Fire for FY 2011 include holiday leave banks in lieu of pay (Police) and deferred salary increases (Fire), amounting to five percent savings.
The Mayor and council members also agreed a five percent reduction to salaries and benefits on June 22 for FY 2011, in line with salary reductions for city staff.
The Hayward Municipal Code allows the Mayor and council members' remuneration to increase annually, as of June, by the Bay Area Consumer Price Index (CPI), capped at five percent. The seven elected officials receive the same deferred compensation benefit as unrepresented employees. Mayor and Council have forgone these increases for the past six years, saving the city an aggregate of $98,000. The five percent reduction for FY 2011 will save $11,000.
They have indicated they will participate in reductions for FY 2012 according to needs identified during the FY 2012 budget process.
A 104-hour furlough program will be implemented. Half of the furlough obligation will be achieved with the closure of City Hall during Thanksgiving (November 22-24) and a week's closure between Christmas and New Year (December 27-30). Other city facilities will remain open during this time with a skeleton staff. The Library will not close during the festive season. Full-time employees in the program will see a four-hour reduction in 26 pay periods from the start of FY 2010-11.
Vacation accrual caps will be introduced to limit payout for long-term leave. Previous furlough programs saw the cap lifted with unlimited vacation accrual. Contractual accrual limits will be phased back in by 2013.
All bargaining units have committed to saving up to five percent in FY 2012. The form of these measures has yet to be determined. Additionally, in exchange for a two-year contract extension, HAME, SEIU Local 1021 and Loca121 have also agreed to defer salary adjustments, which will depend on three criteria for economic recovery, for FY 2012 and to link pay to the CPI for FY 2013.
Economic recovery indicators in the agreements are:
á Economic Uncertainty and Liquidity reserves funded at 10 percent and five percent of annual operating budget, respectively, as per Council policy.
á Revenues recover and return to FY 2008 sales tax-revenue levels, or greater, and to FY 2009 property tax-revenue levels, or greater, as reported in the city's Comprehensive Annual Financial Report.
á No economically-forced layoffs needed to balance the budget or meet the structural deficit.
Additionally, the closure of City Hall and some facilities will reduce utility costs and save on janitorial services.