The layoffs made at Murrieta City Hall this week were carefully chosen, according to Murrieta Mayor Doug McAllister.
Thethat eight full-time employees and six part-time city employees were let go in an effort to help close a $2-millon expected budget gap for fiscal year 2012-2013, which begins July 1.
While city council did not have an ultimate say in which positions were eliminated, McAllister said in a phone interview Friday that council does give direction to keep cuts away from those that would directly affect the public—such as police and fire.
"The council's only true employees are the city manager and the city attorney," McAllister said. "We don't micromanage. What we do tell them—our overall policy is—the last cuts that would have to be enacted would be anything that touches the public. We don't want to impact those services; those are the last things we'd touch."
In total, eight full-time employees and six part-time were laid off this week. An already vacant police officer position and four upcoming retirements take the staff reduction to 19.
City Human Resources Director Jeff Price said breaking the news to the valued employees was not an easy task.
"These were really good people—people with famililes and bills to pay," Price said. "It was really hard to do this. It was depressing to have to lay these people off."
The reductions combined total a little more than $1 million of the $2 million needed to balance the budget, according to an email sent by City Manager Rick Dudley.
Out of a $36.4-million general fund operating budget for fiscal 2012-2013, police make up 67 percent of $34.4 million in anticipated expenditures, according to a budget report presented to city council this week.
Administrative services take up 14 percent, public works and building 10 percent, community development 5 percent and non-departmental costs 4 percent.
Fire and library have separate funding mechanisms and are not included in the general operating budget.
Eighty-two percent of Fire Department revenue comes from special property taxes. It has an operating budget of $12.1 million for 2012-2013 that will need to be trimmed to $11.4 because of a $700,000 expected deficit, according to the report.
Fire revenue has dropped $3.3 million since 2008-2009, the report stated. To compensate, the city has negotiated and budget cuts have reduced fire operating expenses by more than $1.6 million, according to the report. A and other budget-saving measures are being explored to help offset the Fire Department's expenditures.
Library revenue is also generated by property taxes, to the tune of 94 percent. The Library has a 2012-2013 operating budget of $1.8 million, with no forecast deficit. However, Library revenue has steadily dropped from $2.4 million in 2006-2007. Additionally, the Library lost $130,000 this fiscal year due to state actions.
Three part-time Library staff were included in a round of layoffs conducted early in the week.
Other layoffs included three part-time and three full-time employees from the Community Development Department/Redevelopment Agency.
McAllister said cuts to Community Development were related to state dissolution of redevelopment agencies early this year.
"Redevelopment funded several salaries," McAllister said. "There is no money to make up the difference, at least not to do it in a responsible way. We cut everywhere we could and so we knew there would have to be some cuts in personnel."
While overall city revenue is expected to increase 3 percent in the 2012-2013 fiscal year that begins July 1—with a 6 percent increase in sales tax—interest income will decrease 40 percent. The city has also lost 100 percent of Vehicle License Fees to the tune of $350,000 per year. ()
Major impacts forecast for the 2012-2013 budget were listed as elimination of the Redevelopment Agency, workers' compensation, health insurance and retirement costs, expiration of and current labor contracts.
This follows a steady decline in city revenue, from $42.5 million in 2007-2008 to $32.7 million expected in 2012-2103.
"When you have a budget (in which) over the last four or five years you have lost $10 million in revenue, we knew there were going to have to be cuts," McAllister said.
A five-year budget-balancing plan presented by City Finance Director Joy Canfield included eliminating general fund transfers to the Community Services District for three years; reducing operating costs by an additional $2 million on an ongoing basis; and using $3.7 million in economic contingency funds to bridge the gap.
A one-year budget had previously been adopted to see where the economy was heading, according to Canfield.
According to the budget report, reductions made by the city so far have included: cutting department maintenance and operation budgets; freezing 47 vacant positions as of July 1, 2011; offering a retirement incentive program; reassigning staff to duties with alternate funding sources; negotiating employee concessions; relocated city staff from old city hall to reduce utility and janitorial costs; reducing contracts for services; decentralizing purchasing; converting to fixed fees; standardizing agreements with city attorneys; scaling back on special events and seeking sponsorships for them; and using technology such as installing an automatic Library bin sorter and offering online community services registration and business license renewals.
Property tax increment distribution is expected to recover, with a 5 percent increase expected. It would be the first increase since 2007-2008, according to the report, when that revenue was $15.7 million. In 2011-2012, the city brought in $11.8 million in property tax revenue, up from $11.6 million the prior year and $12.4 million in 2009-2010.
"In this economy, there is no way to really see very far ahead," McAllister said. "We are seeing it recovering, the recovering looks good so hopefully we won’t have to do (these layoffs) ever again. Because if we have to do this again, it will start to affect the public.
"The bottom line is, none of us wanted to do this. But we had a choice. We could do what government typically does—be irresponsible with money—but we made a decision a long time ago we were not going to be that way."