Budget gap is $6.9M

CITY HALL — The City Council kicked off efforts Tuesday to balance the budget, vowing to avoid layoffs as the means to plug a $6.9-million hole.

“The priority is not laying people off,” City Manager Jim Starbird said at the first budget study session for fiscal year 2009-10. “That’s counter to what we’re trying to do.”

There are roughly 100 vacancies citywide, around one-third of which are paid for through the city’s general fund. Despite the hiring freeze, city executives have been filling essential vacancies by reorganizing employees.

Those transfers could pose their own challenges, Councilwoman Laura Friedman said. Maneuvering employees into positions not suited for their skills could hinder efficiency, thereby undermining efforts to save money, she added.

City officials proposed a number of strategies for closing the projected budget gap, including continuing the hiring freeze, which could save up to $4.5 million over the course of the next fiscal year, which starts July 1.

Program reductions could save another $3.6 million if all departments take a 5% cut, and renegotiating planned salary increases for members of the Glendale Police Officers Assn. would save $2 million, according to a city report.

In order to balance last year’s $9.9-million budget shortfall, the City Council reduced recreation programs, library services, school resource officers in the city’s middle schools and community policing efforts. The city also eliminated 43 vacant positions and laid off two workers.

Since then, the economy has continued to slide into the worst recession in decades, further straining the ability of the city to provide services amid falling tax revenues.

Automotive sales, which provide a third of the city’s sales tax, have dropped up to 50%; construction-related spending has slowed; the credit market has yet to defrost, and multiple retail outlets, including Mervyn’s, Circuit City and Linens n’ Things, have closed.

Despite the slump in consumer spending, sales tax revenues were bolstered somewhat by the Glendale Galleria and the recent opening of the Americana at Brand, finance officials said.

Local unemployment has also continued to rise, reaching 9.9% in March.

As a potential bright spot, the city is also expecting roughly $6 million in federal stimulus money for public works projects.

If the money is released, Starbird said, it would allow the city to rely less on the general fund for the projects.

Amid the gloomy budget forecasts, Councilman Dave Weaver seized on what he called a “silver lining” — a concerted effort to clamp down on spending and finding ways to become more efficient. He also cautioned that it was critical to maintain an effective balance in staffing in order to maintain the city’s competitive edge.

“We want to be cautious that when the economy turns, we’ve [not made] too many incisions,” Weaver said. “In good times, you tend to relax . . . now we’re really tightening down.”

The City Council plans to meet at least a half-dozen times before drafting a preliminary budget in June.