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Council Holds Final Budget Hearing

Tuesday June 17, 2003

Tuesday is the last opportunity for the public to sound off on next year’s proposed budget, which seeks to counter a $4.7 million deficit by raising parking fines and continuing a city hiring freeze.  

City Council holds its final public hearing on the budget at 7 p.m. in Old City Hall. Afterward, the council will consider increasing most of the city’s 135 parking fines by 40 percent in an effort to raise $2.5 million for the general fund. Also up for discussion is the 2004-2005 budget, for which city officials forecast a much larger deficit. While officials are confident the city will survive the coming fiscal year without too much pain, they are talking about opening up the city’s five union contracts the following year to avoid widespread layoffs. 

Council will adopt the final budget for fiscal year 2003-2004 at its meeting next week, on June 24.  

The fiscal year 2004 budget proposal calls for the elimination of 22.5 full-time jobs. Sixteen of those positions are currently vacant and the remainder are expected to be vacated through attrition by the end of the year. In addition to the proposed parking fine increase, the council approved a bundle of city fees on May 20. Some of the fees included ambulance user fees, garbage fees, recreation fees and annual fire inspection fees.  

Complicating the city’s budget planning is uncertainty regarding the state Legislature’s response to a statewide shortfall of $35 billion. If the Legislature adopts a draconian budget, Berkeley could lose an additional $3.6 million in fiscal year 2004. 

To contend with this uncertainty, council will likely adopt an alternative budget, which calls for the elimination, mostly through layoffs, of an additional 28.8 full-time city positions.  

The council will also take steps to prepare for fiscal year 2004-2005. The deficit is expected to soar to at least $8 million the year after next largely due to $5 million to $6 million in increased city employee retirement costs and $2 million to $3 million in reduced tax revenues due to the depressed economy.  

The unknown factor in fiscal year 2005 remains the state budget. Berkeley’s deficit could climb to $12 million depending on reductions in state funding. At that point, the city will consider closing city hall one day a week, rotating the closure of one fire station and laying off as many as 150 city workers. If the fiscal year 2005 budget forecast worsens and massive layoffs are considered, some officials have discussed renegotiating the five union contracts signed by the city in 2002. 

Mayor Tom Bates said the unions might be interested in renegotiating benefits and scheduled salary increases to avoid heavy layoffs. He said the city is feeling pressure from a statewide retirement benefit that gives police and fire personnel the option of retiring at age 50 with enhanced pensions. 

“Contracts cannot be opened unilaterally, the unions have to agree,” Bates said. “But I think public employees want to see people keep their jobs and avoid layoffs.” 

However, Sandra Lewis, president of the clerical chapter of Service Employees International Union Local 790, said she would have to know a lot more about the budget before she would consider reopening her union’s contract. For example, she said, she would have to know how many people would lose their jobs compared to vacancies created by attrition. 

“There has been no talk that has come to me formerly about opening up the contracts,” she said. “No union likes to hear that. We’re not even a year into the new contract and I’m not inclined to open it up, as chapter president.” 

The public hearing will be held during the regular City Council meeting at 7 p.m. in Old City Hall located at 2134 Martin Luther King, Jr. Way.