The Madera City Council thought long and hard Wednesday night before declining to eliminate any full-time city positions for now.
Council members were pondering a presentation by city finance director Tim Przybyla, on behalf of City Administrator David Tooley, on ways the city could break even through various cutbacks during what is expected to be a time of falling tax revenues, and even a recession.
But the real elephant in the room seemed to be the likelihood of big increases in fees for employee retirement pensions — increases over which the city has no control.
After reviewing various options provided by city staff, council members voted to initiate a “soft” hiring freeze, consolidate jobs, reorganize departments and/or not fill vacant positions, decrease city travel, education and training expenses, and continue to look for other ways to fill the looming $1 million dollar-plus budget deficit that is predicted to be caused by increasing city employee pension costs being demanded by the state Public Employee Retirement System, also known as PERS. Only a few part time positions will not be filled or will be eliminated.
As a show of solidarity, the council members recommended cutting their own $1,700 yearly travel allowances by half, for the remaining six months in the fiscal year.
Early retirement options and bonuses have been offered and accepted by four current employees.
Two parks and community services employees working in administration have left for other jobs or been transferred into other open city positions.
These initial cost-saving measures may only be approximately half of the deficit projected for the coming fiscal year, with any of the remainder being taken from the city’s “rainy day” fund of around $13 million.
Officials said revenues from sales taxes were unpredictable but could rise should the economy remain steady and new developments be completed, though they also thought the economy was due, or overdue for a downturn.
Business owner Khalid Chaundry spoke during public comment, and citing a report in The California Political Review said he thought executive salaries in the city were too high and should be reviewed and reduced. “Executive salaries (together) are $2 million dollars,” Chaundry said. “That is too much … this is a very poor town. And now you want to lay off the little guys. That is going to affect our services …”.
City Administrator David Tooley said the options in front of the council were challenging in scope and many in number.
“We really need direction and some action tonight. Otherwise we are just kicking the can down the road and the decisions next year will be that much more difficult. At this point the (projected) loss to the general fund (reserve amount) is something in excess of $2 million dollars, depending on changes in the economic cycle … The correct and prudent action is not to wait for the crisis but to make a series of incremental changes now,” Tooley said.
Attempting to retain as many city employees as possible in their jobs, while minimizing the impacts on services to the public was the goal, according to Tooley.
He said he was also hopeful that pension funding reforms were on the horizon, otherwise many cities in the state would be facing bankruptcy if changes in the pension system were not made.
“Thankfully, Madera is not one of those (looking at bankruptcy),” he said.