About 130 Tacoma municipal employees across most city departments face losing their jobs under a tentative plan to close a projected gap of more than $26 million in the city’s two-year general fund budget.
In addition to those potential layoffs, top city administrators and non-union employees face pay cuts and up to 12 furlough days per year, interim City Manager Rey Arellano told Tacoma City Council members Tuesday.
“It’s been very difficult coming up with these recommendations,” Arellano said. “It’s a very difficult thing we see before us.”
Facing shortfalls to expected revenues and some unanticipated overspending, city officials announced last week the general fund budget, approved for $399 million through 2012, was off track by $26 million based on projections to date.
Arellano’s tentative plan seeks to salve an even grimmer budget forecast – a $31.2 million hole that generally incorporates other possible revenue losses, including potential state budget cuts that could impact the city.
So far, Arellano said he’s identified about $25 million in tentative trims and adjustments to help balance the budget through 2012. The city would still need to find another $5 million, he said.
Arellano added he hopes his plan will put the city on solid financial footing for the 2013-14 budget so that future cuts won’t be needed.
“It’s going to be a very fine balancing act,” he said.
The bulk of cost-cutting in Arellano’s three-pronged plan comes from worker pay and job cuts within $20 million of identified “departmental adjustments.” Most of these involve about $16 million in savings from layoffs, he said.
In all, about 130 of the city’s 1,226 union and non-union employees covered under the general fund would be targeted, he said. But layoffs likely would occur in phases, so that the city doesn’t “overshoot” the number of job cuts in case current budget projections prove to be an aberration over time, Arellano said.
A second part of Arellano’s plan identifies $1.6 million in “general reductions.” These include about $651,000 in savings to be realized by imposing 12 mandatory unpaid furlough days per year on each of the city’s 229 non-union general fund employees.
Other general reductions include about $196,000 saved by halting non-union workers’ scheduled step increases and $690,000 in cuts to employee travel and training. Department directors also have volunteered to take 5 percent pay reductions and one furlough day per month, for another $84,000 in savings, Arellano said.
About 1,000 union workers covered under the city’s general fund can’t receive reduced pay or work hours or frozen step raises without the city re-negotiating current labor contacts, Arellano said. But union workers can be laid off.
A final category of adjustments in Arellano’s plan involves “options requiring council action” – eight policy ideas to increase city revenues offered for council consideration. These include such options as imposing a city fee of $20 on license plate tabs, eliminating city business tax deductions for certain health care non-profits, postponing city employee retirement contributions for 2012 and increasing fines for speed and red light camera violations from $101 to $124.
The ideas will be “thoroughly vetted” before the council agrees to enact any of them, Mayor Marilyn Strickland said. “Some of these are a lot easier (to do) than others,” added Councilman Jake Fey, who noted other jurisdictions have gotten into “deep trouble” by delaying retirement contributions.
Arellano’s plan would affect most general government departments, he said, but the city’s library and Tacoma Public Utilities aren’t currently included in any cost-cutting recommendations. Both operate under budgets separately managed by appointed boards. The library system already closed two small branches and laid off 16 employees due to a budget crunch last year.
Exactly which city workers would face layoffs under Arellano’s plan is still to be determined. He said he expects to provide those details to the council before it formally considers the city’s mid-term budget modifications, a process that begins Nov. 15.
Saying he realizes some layoffs are unavoidable, Councilman Ryan Mello said he hoped layoffs and service cuts can be minimized through negotiation with city workers.
“If I was in the position of an employee,” Mello said, “I would rather preserve my job and take a pay cut.”
Arellano said he’s open to alternative strategies, stressing that his plan is “very preliminary.” It could change based on talks with labor unions or direction from the council, he said.
Lewis Kamb: 253-597-8542
lewis.kamb@thenewstribune.com
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