Posted on Thu, Oct. 23, 2003

Richmond cuts won't solve city's shortfall

By Rebecca Rosen Lum - West County Times

RICHMOND - Drastic cuts that threaten basic services and more than 100 jobs will not make up for an ever-widening gap between revenues and spending, Councilman Gary Bell told his colleagues this week. "That may not be the end of what we have to do," said Bell, a mortgage banker who is also chairman of the council finance committee. "We are going to have some very serious shortfalls at the end of this year. These are the facts. It's not good news, but it is the real news."

Finance department reports for July and August, the first two months of the fiscal year, showed revenues coming in lower than what was projected in the $94 million 2003-2004 budget. The $9 million deficit that spurred the pending layoffs and closures of the jail and one fire station is based on the six-month budget approved by the council in July. But "we are short on revenues starting out on the first quarter of the year, so even if we make cuts now we'll be short," Bell said on Tuesday night after reviewing the reports. "Right now we're talking about the general fund. We haven't even begun to talk about the non-general funds like the Port of Richmond."

Sales taxes, projected to remain flat, have plunged by $500,000. The utility users tax, which voters raised through Measure J last November, is generating a fraction of what was anticipated. "We continue to spend money in spite of the shortfalls," Bell said. "We continue to give generous benefits packages. We continue to think in a traditional way." Mayor Irma Anderson several times during Bell's presentation at the council's meeting, urged him to think more positively, to cease dwelling on the failures of the past and to give city staff more credit for a job well done. Council members offered no comment on his financial analysis.

The council recently approved a sweeping cost-cutting effort that will knock out 105 jobs, shutter the city jail and at least one fire station, and slice library hours by as much as half to plug a $9.5 million gap created by raises, increased pension benefits and soaring health care costs. Councilman Tom Butt also has voiced alarm at the city's spending proclivities and doubt about its "Hail Mary budget." "Richmond has fallen victim to the same factors that put the state of California some $35 billion in the red," he said. "Three years ago, during the dot-com boom, we began negotiating and later adopted agreements with our public employee unions that anticipated the good times would roll on forever." Butt cites other glitches in the budget picture, including ChevronTexaco's refusal to ante up its projected utility user tax increase, roughly $1.2 million, and delays in selling city-owned property for development, Butt said.

City Manager Isiah Turner has asked employee bargaining units to contribute a share to their benefit costs. Barring that, he said every department will shrink by 9.6 percent in January. But that does not solve the growing problem of shrinking revenues, Bell said. "If you make across-the-board cuts, you're presuming the organization is set up OK, you just don't have enough money," Bell said. "We may need to look harder at services, at duplication of services. "We already gave the benefits to the employees. There is no denying those benefits have cost us an arm and a leg. We have to either live up to those decisions, repeal the decision, or restructure the organization to accommodate the decision."

Reach Rebecca Rosen Lum at 510-262-2713 or rrosenlum@cctimes.com.