SAN JUAN CAPISTRANO : City Hiring Frozen, Layoffs Considered

Faced with a shortfall of nearly $1 million, the city has imposed a hiring freeze and is considering layoffs.

While the city has experienced increases in revenues from sales and property taxes, the “dramatic recession in the building industry” is being blamed for the projected $909,000 shortfall in San Juan Capistrano’s income, according to George Scarborough, assistant city manager.

The shortfall represents about a 10% decrease in projected revenues for the city’s $11-million operations budget.

“This is a situation that is certainly not unique to us, but we have to grapple with it,” Scarborough said. “We made these projections at the beginning of the year, when the economy was much rosier.”

Among the measures the city has instituted to deal with the shortfall are a freeze on overtime, a freeze on employee training and travel, a freeze on vehicle and equipment replacement and the hiring freeze, which has already prevented six staff positions from being filled, he said.

The city has also reduced its maintenance contracts and use of consultants. “We hope to avoid layoffs, but we are evaluating everything,” he said.

It was just three years ago, in the midst of an expanding economy, that the city expanded its staff from 77 full-time employees to 91, most of them in the public works, building and planning departments. Those are the departments most affected by the shortfall, Scarborough said.

Developers have postponed breaking ground for several developments, representing more than 700 residential units, he said.