Even the library will be cut

The Chico City Council spent Tuesday (June 16) in an all-day workshop going over the city’s preliminary $48.5 million budget for 2009-10, which will require numerous cutbacks and other fixes to help bridge an $8.5 million gap between revenues and expenditures.

So it was remarkable that the only significant controversy involved a proposal to cut $55,000—or about one-thousandth of the total budget—from one agency’s allocation.

Because it was being cut from the library, however, it was enough to fill council chambers with red-shirted supporters. The library is used more directly by more people than any other agency in the county.

In recent years the city has allocated sufficient funds to keep the Chico branch of the Butte County Library open an additional 25 hours a week on top of the hours funded by the county. Last year, the city’s cost was $187,000. This year, City Manager Dave Burkland is recommending that the funding be reduced to $132,828, sufficient to keep the library open an additional 18 hours.

The county, facing a budget crunch exponentially greater than the city’s, already has cut the number of hours it funds from 42 to 30, which is why the facility is no longer open Sundays.

Because the city needs to close a deficit, all of its allocations to outside groups, including service and arts organizations, are being cut, Burkland told the council. Fairness and prudence dictate that library funding be cut as well, he said. “[The proposed allocation is] the most the city can provide, given its financial situation.”

Councilman Larry Wahl, an ardent supporter of the library, immediately jumped in. “This is the biggest group we’ve had today on any issue,” he exclaimed, indicating the large audience.

He then started listing some budget items he felt could be nixed or postponed to come up with the $55,000, such as a bike path fence at $62,000 and $200,000 for implementing the new general plan that, as he pointed out, won’t even be finished until the end of 2010.

“Out of all those dollars, I’m sure our trusty city manager can find enough money to keep the library open an additional 25 hours,” Wahl said.

About 10 people addressed the council on the issue, all supporting keeping the library open longer hours. Susan Rauen, manager of the Chico branch, called it “an essential community service,” especially in these difficult economic times, and local television journalist and children’s-book author Debbie Cobb insisted, “It’s not a county library, it’s not a city library, it’s our community library.”

In the end, though, four of the council members agreed with Burkland. As Jim Walker put it, “It will give me no joy to vote [against the larger allocation], but I can’t support one entity over others.”

Mayor Ann Schwab noted that $131,828 is “a tremendous portion of the city’s extra funding” for outside groups. She noted that funding for community-based organizations (CBOs) had been cut by 25 percent in the past two years, that the city had cut its spending by 7.5 percent, and that its employees had renegotiated raises and accepted either tiny (1 percent) cost-of-living increases or no increases at all.

Schwab, Walker, Mary Flynn and Andy Holcombe voted to approve the $131,828 allocation. The matter will come up again during the final budget hearing on July 7.

In other city budget news, the council gave mostly blanket approval to Burkland’s strategy for bridging the budget gap. As both he and Finance Director Jennifer Hennessey explained the situation, the strategy includes fund transfers, staff attrition, cuts to CBOs, budgetary fine-tuning, delaying replacement of vehicles and equipment, and continuance of the 7.5 percent reduction strategy of 2008-09.

The good news is that it will not require additional layoffs.

The budget is balanced, but barely: It’s about $131,000 in the black.

The challenge, Burkland explained, is to cut expenses while maintaining staffing levels sufficient to deal with the increase in city business when the economy improves. One strategy has been to move employees around among the departments, to make good use of their time. With less development going on, for example, there’s less call for engineers to vet proposed projects, so they can be used on the city’s own capital projects, instead of outsourcing those jobs.

The budget gap is caused by an overall 6.5 percent reduction in revenues, especially sales tax, caused by the recession, Hennessey said. She cited weak auto sales and high unemployment as causes.

Although the national economy is improving, California is still spiraling downward toward 12 percent unemployment and isn’t expected to bounce back before 2011, she added.

Although the city’s budget is still in the black, it’s threatened by a possible deeper sales-tax decline, the “domino effect” of layoffs elsewhere locally (school districts, Chico State, county, private businesses) and the state’s possible “borrowing” of local funds.

In the latter case, the state could borrow up to $1.2 million—money that could come out of the city’s healthy $6.6 million emergency reserve, since it would be repaid within three years.

The city is also worried that the state might commandeer some of its gas-tax revenues—as much as $1.5 million—and “borrow” $800 million in Proposition 42 street and road maintenance revenues.

In response, city administrators have developed a three-tiered contingency plan to respond to varying levels of budgetary destruction that could be caused by the state. “Things are changing fast,” Hennessey said. “We’ll have trigger points for implementation of these plans in an efficient manner.”

Ultimately the council approved the preliminary budgets for both the city and the redevelopment agency, with only Wahl dissenting, and only on the city budget because he thought its revenue assumptions were “too optimistic and rosy” and that it was “applying Band-Aids” where surgery was needed.