City Manager Debra Figone released her 2013-14 budget proposal, balanced, she says, through fiscal reforms, layoffs and switching to cheaper retiree healthcare. Still, the city remains in “a fragile situation,” partly because of litigation it faces over Measure B pension reforms.
The $2.6 billion proposal falls about 5 percent short of the current-year budget to make room for mid-year budget adjustments. Figone says her plan aims to reinstate services lost to previous cuts and steadily build up the city’s reserves to brace for expected shortfalls in coming years. Her two–year approach suggests putting aside $13.7 million into a rainy day fund and figuring out how to make service delivery more time- and cost-efficient.
Since San Jose’s tied up in lawsuits with Measure B and Santa Clara County over Redevelopment Agency money, Figone recommends setting aside another $33.5 million for “potential negative outcome of litigation.”
“We’ve balanced our budget through strategic fiscal reform, modest increases in revenues from a stronger economy, and the very careful management of expenses,” Figone says in a statement. “With the improved forecast this year, this budget that holds the line with a limited number of additions to meet critical needs, and it allows for small potential increases in employee compensation.”
It took some give-and-take to allow for those pay bumps, she notes.
“These increases have been made possible, however, because we reduced or eliminated certain significant costs, including the new lower cost plan for retiree healthcare and the elimination of the Supplemental Retirement Benefit Reserve,” Figone says. “If not for these changes, we would not have the resources available to consider these additions to our budget. We’re still in a fragile situation.”
Despite the modest raises Figone proposes, she expects the city will have to layoff or re-assign some staffers. The overall staffing level would increase by 129 positions, though, to a total 5,651 employees, the proposal states. That’s 24 percent less than the city’s peak staffing level 13 years ago.
The new hires would include 21 community service officers in the police department to take over some technical and admin work like interviewing witnesses, snapping pictures of crime scenes, jotting down telephone reports, fingerprinting and collecting evidence.
More budget proposal highlights include:
• Open the new-but-empty south city police substation.
• Allocate $8.6 million to upgrade systems at police office and communications buildings.
• Create an $11.1 million employee compensation reserve to start restoring pay cuts and regain the city’s reputation as a competitive employer.
• Improve service, including $3.3 million to deal with homeless encampments over the next couple years.
Figone’s proposal comes a little more than a month after Mayor Chuck Reed released his own budget plan. Reed’s plan echoed Figone’s cautious optimism, saying the city’s situation is improving, but that rising retiree pension and healthcare costs jeopardize the city’s future financial standing.