Richmond has a new budget, and no one is particularly happy about it. The budget, approved by the city council Tuesday night, is close to balanced and leaves the city’s $10 million general fund reserve intact, but make cuts to already stretched city services and uses one-time measures that put off larger, structural issues until next year.
“It would be real nice to say we adopted a budget that takes care of this fiscal year and thinks about next year,” said Councilmember Tom Butt. “But it’s clear we haven’t done that, and I guess it’s not something we could really do right now.”
The city is faced declining tax revenues, and departments that generally sustained themselves through fees—like the planning department and building services—require subsidies because fewer new projects are getting underway. The state budget makes cuts to local level programs and funding necessary, and redevelopment funds have been cut entirely. A previous iteration of the budget relied on increased sales tax revenue from Measure D, which would have raised $2.2 million annually to city coffers, but voters rejected the measure earlier in June. Meanwhile, healthcare and pension costs continue to rise.
The combined general fund and capital improvement budget is about $160 million, $2 million less than last year.
The city will offer early retirement for some city employees, which will save it about $300,000. City Manager Bill Lindsay said the city’s cutting down on city-funded cell phone and city vehicle use. And payroll is down five percent from last year, although he says that it comes with a price.
“You can’t just cut payroll and expect there to be no effect,” Lindsay said in an interview prior to the meeting. He said that he’s seen efficiency increase in city departments due to previous payroll cuts measures, but that Richmond is at the tipping point where cuts to personnel means curtailing services. The new budget takes 10 percent across the board from all city departments, except for police. Most of that will come from freezing vacant positions.
“I can’t tell you there won’t be any impact to city services,” Lindsay said before the meeting. “I think there will be.” He said that staffing levels at libraries are already thin, and most departments are stretched as tightly as they can without drastically curtailing services.
A big chunk of the new budget, $2.6 million, comes from reserve funds from various defunct projects that were consolidated and brought into the general fund to make up for the city’s revenue stream. It’s a one-time move that helps ameliorate the city’s revenue crunch this year, but leaves the city in a pinch for next year’s budget, Lindsay said.
“It solves the problem of revenues this year,” Lindsay said. “But it doesn’t solve the budget problems in a multi-year sense.”
As it stands, the budget is nearly balanced—the city will run a $750,000 deficit, roughly half a percent. Lindsay said the city is asking employee unions that represent city workers for concessions—to give up a subsidy for new personal computers and for sick leave and vacation buy backs. If they take the city up on those, Lindsay said the budget could pretty much be balanced.
Councilmember Nat Bates said he doesn’t think it’s likely that unions will agree to these concessions. He voted not to pass the budget—which was approved by the rest of the council—saying that he would not vote for a budget that was not balanced and he didn’t think the employee unions would agree to such terms. “I talked to [Service Employees International Union local] 1021 and they indicated they had no interest in givebacks,” he said.
Bates also expressed doubts that the roughly half a million dollars the budget plans on getting from sales taxes and permit fees generated by the Chevron Renewal Project explain what this is were reliable, because the project has yet to be approved. “This thing is probably going to go through legal battles and stuff like that could hold it up until next year,” he said, referencing the energy giant’s last, failed attempt to get its retrofit approved.
Lindsay acknowledged that relying on this uncertain revenue was “a bit of a risk.”
On Tuesday night the city council voted on three addendum issues: allocating $10,000 for the Human Rights and Human Relations Commission, the same amount for the Commission on Aging, and $50,000 for the mayor’s office to hire a consultant to spearhead her efforts to build cooperative, or worker-owned, businesses. After a variously vitriolic and almost slaphappy roundabout discussion that accounted for nearly half of the time they spent discussing the budget, the council eventually passed all three.