A number of budget unknowns this year means that even with the new fiscal year just around the corner, Glendale officials will be left in a state of flux.
At a City Council hearing Tuesday on Glendale's draft $165-million budget, officials said they were still waiting to see how many employees would take an early retirement option, and what the ultimate financial impact of the state's decision to eliminate local redevelopment would be.
“The watchword of this budget process is ‘uncertainty,'” City Manager Scott Ochoa said.
Officials have taken to eliminating jobs this year to help close a $15.4-million budget gap after undertaking deep program cuts last year. The city's position was made worse when Gov. Jerry Brown and the state Legislature killed local redevelopment, sapping millions in property tax revenues that had been used to pay for staff salaries and benefits.
Ochoa had hoped to convince 150 employees to retire early as a way to minimize, or avoid, layoffs. As of Tuesday, 55 employees had agreed to retire, and the city expects another 30 to follow suit, according to a city report.
If that happens, Glendale could save $9 million.
But even with 85 retirements, the city may need to lay off about 16 workers, according to the latest estimate — mostly from the departments of Public Works and Community Services & Parks. Another 25 staff reductions may come from eliminating vacant positions across several departments and eight non-incentive retirements from the Fire Department.
Those reductions could save $4.3 million.
The expected layoffs and retirements equal about 10% of the city's workforce.
Layoff notifications may be sent at the end of this week, officials said. However, how many of them will become official won't be determined until later this summer as the retirements take effect. Eligible employees have until July 6 to take the retirement option.
One thing is for sure, though: Some city fees will increase.
The changes include charging a new 20% fee to delinquent accounts to recoup collection agency costs, a new $5,808 development fee for environmental review work, and upping some library fees, such as increasing the hourly rate for Central Library study rooms from $10 to $20.
Officials had planned to close the Verdugo Skate Park on weekdays to save money, but last week the council asked for a plan to keep it open.
Glendale's budget woes were caused by a structural deficit, which means expenditures exceed revenues, according to the city. Since the city is a service organization, much of its expenditures relate to personnel.
“I think that in many ways, it's a radical budget for radical times,” said Councilwoman Laura Friedman.
The structural deficit also means that even as the economy rebounds, Glendale may still struggle, officials said.
“It's not the economy that's necessarily driving the cuts we must make,” said Councilman Ara Najarian. “It's a combination of forces and influences.”
About half of the city's $15.4-million deficit is due to the loss of redevelopment. In addition to losing funding for salaries and benefits, the city may also lose tens of millions of dollars it lent to its now-defunct Redevelopment Agency over the years, depending on how the state Department of Finance rules.
Ochoa said until the state finalizes its own budget later this summer, the city won't know if other money grabs may occur.
He has said that the budget restructuring will put the city on the right path, but fiscal year 2013-14 may be challenging as well. It won't be until several months into next fiscal year that the city can begin to feel more secure, he said.
“By midyear, we should have our sea legs beneath us,” Ochoa said.