CITY HALL — The city budget gap for next fiscal year is now estimated to be just north of $16 million — a significant increase from the original $10-million projection, and one that could spell the wholesale cutting of public programs.
City officials plan to bridge about $6 million of the gap by maintaining a citywide hiring freeze on vacated positions, but that will still leave $10 million of cutting.
“I know the upcoming budget process will show that this is going to be a difficult year for Glendale,” Mayor Laura Friedman said in her first remarks in the position on Monday. “Not all the programs and services that we’ve come to expect are going to survive this year.
With revenues remaining stagnant and employee pension and healthcare costs continuing to rise, city officials have been bracing for months for a budget gap upwards of $10 million — the fourth consecutive multimillion-dollar deficit.
On top of rising costs, the gap takes into account the absence of the annual transfer of millions in water revenues from Glendale Water & Power, which last stood at $4.2 million. The City Council begrudgingly halted the practice after city attorneys determined it could be ruled unconstitutional.
Executives from all city departments have been asked to identify potential cuts, said city spokesman Tom Lorenz.
“What it’s going to come down to with a $16-million-plus budget deficit is identifying those things that people enjoy today that may not be there tomorrow…” he said. “It will be up to the council to make that determination.”
In recent years, Glendale has been able to fill budget shortfalls without turning to employee furloughs or layoffs by slashing more than 100 vacant positions. But officials said last year that further department reductions could result in job losses.
Much of the budget wrangling will likely happen behind closed doors as city officials return to the bargaining table this year to ask employees to pick up a greater share of their rising pension and healthcare costs.
Glendale employees already pay a share of medical premiums and contribute between 8.5% and 11% of every paycheck to the state pension system.
Over the next four years, Glendale can expect to pay more than $135 million into the California Public Employees Retirement System, according to the city's most recent annual financial report.
The lengthy budgeting process is scheduled to begin at 9 a.m. Monday as the City Council holds the first of a dozen scheduled special budget meetings to discuss potential budget reductions.
“We are going to start very broadly at the big picture and then hone in and drill down on both the revenue side and the expenditure side, and hopefully come to a balanced budget at the end of the day,” Councilman Ara Najarian said on Wednesday.