City Hiring Freeze Imposed Due to Budget Crunch

City hiring is being suspended, maintenance of parks curtailed, overtime eliminated and travel reduced to help close a $25-million budget gap this fiscal year, but San Diego faces new financial difficulties beginning July 1, City Manager Jack McGrory said Tuesday.

Less than a month after McGrory presented a dreary fiscal forecast to the City Council, which showed a drastic drop in property, sales and business taxes in a tight economic climate, he developed a plan to replace some of the fallen revenue.

McGrory briefly outlined his proposal to the Council Tuesday but will present a written report Friday.

Only public safety, trash collection and library services will remain unaffected by the cuts, he said.

About 250 jobs have not been filled and McGrory proposes to freeze about 125 more: 51 management jobs, 30 clerical positions and 45 blue-collar jobs. Hiring for seasonal workers, such as those who do landscaping on city property, is to be postponed.

While there are no layoffs planned for any of the city’s 7,000-person work force, nearly all overtime is to be eliminated. The city is also asking its four labor unions to have its workers consider taking vacation time instead of collecting stored-up vacation pay.

“With the growing numbers of unemployed in California, what we don’t want to do is lay more people off,” Mayor Maureen O’Connor said.

Personnel freezes and other labor reductions are expected to save the city $7.8 million. Reducing travel is expected to save another $200,000. A delay in maintaining city parks, city property and buildings will net another $2 million.

“Some parks may be fertilized two times a year instead of three,” McGrory said. “Tree trimming and mowing on city property may be reduced. Replacement of carpets in city buildings will be delayed.”

About $7.5 million will be obtained by a delay in purchasing city vehicles and equipment. The city is to buy only that equipment that is considered an emergency, McGrory said.

The bids for several capital projects have come in under budget and others have been delayed, resulting in another $7 million in savings that have been transferred to the city’s operating budget.

The city’s current financial crisis is due primarily to a lack of growth in sales tax revenues. Fiscal year 1992 was the second in 30 years when sales tax revenues did not rise over the previous year. In fact, they fell about $15 million.

Property taxes plunged $6 million, property transfer taxes dropped $1.2 million, interest earnings fell $1.8 million and business taxes decreased $500,000. Development fees fell $800,000.

The $25 million in cuts is only a temporary solution, however, McGrory said. Come April 20, when the city manager is due to produce budgets for fiscal years 1993 and 1994, the money dilemma will surface again.

“You can defer and delay expenditures for only a certain amount of time,” McGrory said. “But now we’re looking at significant cuts in our operating budget and service cuts as well.”

The city’s financial management director, Pat Frazier, said it is unusual for the city to have such a high budget deficit in the same fiscal year. Usually, she said, the deficits run from one year to another as new demands for service are made.

“The recession has really impacted the city,” Frazier said. “And you can’t expect to make that up in one year. I don’t see that happening. The economy is reacting slowly and you can’t anticipate recovery and growth in one year.”