NEWPORT BEACH : City Officials Hear Gloomy Budget News

Department heads and representatives of the city’s six employee associations met for a 90-minute budget workshop Thursday morning, learning that they will likely face major cutbacks that could include layoffs.

City Manager Kevin J. Murphy said that in light of the budget Gov. Pete Wilson presented last week, Newport Beach could lose more than $4 million in property tax revenues. This matches the city’s most “pessimistic” predictions and means that departments will have to cut their budgets by as much as 10%, Murphy said.

In the coming week, department heads will submit a list of their programs to Murphy, ranking them as “highest,” “high,” “medium” and “low” priorities. Then, by Feb. 19, each department will draft two budget alternatives, one that cuts spending by 5% and another that cuts spending by 10%.

Although city officials say layoffs are likely, they have formed a committee to research public- and private-sector programs that offer incentives for early retirement as an alternative.

“We will develop a layoff policy, and we will use it if we have to, but the hope is that by creating incentives for people to access early retirement, we can achieve the downsizing largely by voluntary means,” Personnel Director Duane Munson said. “It would be worth it if we could create economical incentives that would be meaningful for our employees to do that for the psychological well-being of our organization.”

Thursday’s session was the city’s first-ever budget workshop that included representatives of the employee groups. Even though the news is bad, association leaders said, they are happy that the city is keeping them informed and asking for their input in the budget process.

“It’s nice to have a meeting,” said Mark Puglisi, a public works inspector who heads the professional and technical workers’ association. “It’s nice to have a city manager who is trying his best to communicate with employees in these tough times. Sometimes information is very, very useful--it allays people’s fears.

Murphy and Finance Director Dennis Danner held similar budget seminars when they worked together in Alhambra several years ago. Murphy said communication is key, especially when times are tough.

“It’s quite likely and probable that there are people within the organization who will have their job status affected, and we’d like to give them as much notice as possible,” Murphy said.