Who’s got the money?

The Chico City Council meeting Tuesday (March 20) was all about money, approaching that all-important issue from several directions.

There was a long discussion of the budgeting process the city is now in the thick of, including City Manager Dave Burkland’s recommendations on how expenses can be cut, followed by some pushback from the Chico Police Officers Association, which is unhappy that three vacant Police Department positions will go unfilled.

Then there was a discussion of the redevelopment-agency dissolution process, and the possible fiscal snags there. And, last, the council took up, once again, Councilman Bob Evans’ request that the budgeting process be prioritized, with replenishing the reserves being given the greatest importance. As it turned out, there was a surprise in store for Evans.

But to the budget first: City Finance Director Jennifer Hennessy said she anticipated—very tentatively—that revenues would be up by 4.5 percent in 2012-13, “the largest increase in quite some time.” Nevertheless, she continued, there’s still a shortfall of $2.2 million between revenues and expenses.

City Manager Burkland had been meeting with those department heads to determine where cuts could be made, she said. He’d since made several recommendations, including not filling 11 vacant positions, for a savings of $1.1 million.

Those positions include two retiring police officers and a police services administrative manager, a code enforcement officer, three firefighters, two maintenance workers and two administrative analysts.

Other savings would come from a 5 percent across-the-board cut to non-salary expenditures such as non-mandatory training and office expenses ($370,000); delaying fleet replacement ($700,000); increasing city fees ($50,000); and reducing the funding for community-based organizations, arts groups, economic development and the library ($100,000).

Perhaps the strongest challenge to the preliminary budget came from Will Clark, president of the Chico Police Officers Association. The city has calculated that the dissolution of its redevelopment agency has meant the loss of funds to pay the salaries of 25 full-time-equivalent positions, he said, and yet most of the people who worked on RDA matters are still employed. He asked why that was, and why some of those positions couldn’t be eliminated in favor of police and fire positions.

Burkland responded by saying that most of the employees who worked on redevelopment had other duties as well. “We’ve reduced our staff by 22 percent in the last four years,” he said. “The workload is greater than the time available.” He said he’d be looking at all departments for cost efficiencies but didn’t anticipate any layoffs.

Clark and the CPOA are well aware of the city’s precarious financial position. That’s why Steve Allen, their long-time labor negotiator, stepped forward to tell council members that the association had presented a negotiating proposal to the city early so it can be incorporated into the budget process.

The CPOA is proposing pension reform, including adoption of a two-tier system, in return for a modest 1 percent salary increase. “The POA is proactively working with the city to preserve and hopefully expand the services the POA offers,” Allen said.

Councilman Andy Holcombe, noting that the benefits of a two-tier system “come 10, 15, 20 years down the road,” said he would need more information but welcomed the group’s initiative.

In other money matters, the council heard from Senior Planner Shawn Tillman, who gave an update on the RDA dissolution process.

The most significant news, he said, was that the state Department of Finance has decreed that two affordable-housing projects, Harvest Park and Northpointe, can’t go forward because contracts haven’t been signed. The city is appealing that decision on the basis that the only contracts still to be signed involve the contractors, not the city.

Finally, the council took up Evans’ request to prioritize the budgeting process. But no sooner had he explained once again that highest priority would go to replenishing the reserves, followed by replacing staff positions and, third, raising salaries, than his erstwhile ally, Councilman Mark Sorensen, undercut him.

“These priorities aren’t etched in stone,” Sorensen said. “So I recommend we approve them but strike the words Priority 1, 2 and 3.”

“To what purpose,” Evans asked, taken aback. “Are they equal priorities? … I don’t want it interpreted that we can give raises but deplete the reserve.”

But it was too late. Other council members thought Sorensen’s idea was a good compromise and voted to approve it. “I find myself in the awkward position of voting against my own proposal, the way it’s amended,” Evans said, before casting the lone vote in dissent.