Glendale attempts to find 'new normal' amid steep budget cuts

As officials started the arduous process on Monday of figuring out how to close a projected $15.4-million budget gap, City Manager Scott Ochoa warned that Glendale was facing a “new normal” — and it’s not pretty.

Last year, when the city closed an $18-million budget gap, officials thought the new $170-million spending plan would be the base against which all future years would be compared. But without redevelopment, they’ve had to push that bar even lower.

“We’re trying to understand what the new normal is,” Ochoa said during a City Council meeting Monday, adding that after the next round of cuts for fiscal year 2012-13, officials hope their “feet will finally be touching the bottom of the pool.”

For next year, the city expects a roughly $15.4-million budget shortfall, $7.7 million of it due to the loss of redevelopment revenues.

In February, Glendale shut down its Redevelopment Agency, along with about 400 other cities throughout California, due to a state mandate.

The burden will be made heavier as officials budget money for additional expenses, including compensation for employees injured at work, lawsuit payouts and pay raises, which are expected to run about $1.2 million, $1.8 million and $1.4 million, respectively, according to a city report.

City Council members expressed surprise that employees with positive performance reviews automatically move up to the next salary step after a certain period of time.

Ochoa said the city may have to restructure the rules that govern how employees get raises, perks or face layoffs.

“Nobody knows what the answer is,” Ochoa said. “But it probably isn’t what we have today.”

Since the city cut most of the fat to balance last year’s budget, Ochoa told the council that there isn’t much left to cut. Rather, city departments will face restructuring and layoffs.

Ochoa recently warned that the city could cut 29 employees from the payroll.

Retirement incentives and furloughs are also on the table.

Ochoa said layoffs would have the most immediate cost savings, but they could cause organizational confusion. That’s because some employees who might be laid off have the right to take another position at a lower salary, bumping out another employee.

Furloughs would also have immediate cost savings, but would impact public service hours and programming.

Cost savings would lag with retirement incentives, but the city could be more specific with its organizational changes, Ochoa said.

Several council members said they liked that option more.

“Incentives for retirement, it works,” said Mayor Frank Quintero. “I think it’s absolutely worth investigating, working on, seeing what it can translate to.”

Councilman Rafi Manoukian said he would support incentives, but wanted to ensure positions left open by retirement would not be refilled.

Councilwoman Laura Friedman said she wanted to know how the personnel reductions would affect service programs, but Ochoa said that information has yet to be etched out.

“You can’t lay off large numbers of people and not have service impacts in the community,” Friedman said.

This is the fifth consecutive year that the city has struggled with significant budget shortfalls. Reductions in the General Fund, which pays for most public services, have totaled about 16% over the last four years, according to a city report.

“I sure hope we don’t have to do this again,” said Councilman Dave Weaver.

Monday’s meeting was the first of several budget study sessions scheduled in the coming days. Officials are slated to reconvene today at City Hall for a more in-depth analysis.

Copyright © 2019, Glendale News-Press
EDITION: California | U.S. & World
65°