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Northern California City Asks Residents, Employee Unions for Cost-Cutting Ideas

Facing a $35.2-million deficit, Richmond talks with leaders, sets town hall meetings.

March 05, 2004|Robert Hollis | Special to the Times

RICHMOND, Calif. — City leaders here are appealing to employee unions and residents to find ways to close a $35.2-million budget deficit that has already led to layoffs and temporary closings of fire stations.

Elected officials and top staff met this week with leaders of six unions representing city employees to review a mid-year financial analysis that showed the 2003-04 deficit had grown substantially since December.

They also scheduled six town hall meetings at which residents and business owners are being asked for their ideas on proposed budget cuts.

The new deficit estimate represents more than a third of the city's $104-million budget for this fiscal year.

Before the end of this month, the City Council is expected to order more cuts in city services and probably more layoffs of city employees, including firefighters and police.

Richmond, Contra Costa County's second-largest city, laid off 18 firefighters and began rotating one-day closures of three of its fire stations in January, an unpopular move that is expected to save about $1.2 million for the rest of the budget year.

The industrial city of 107,000, northeast of San Francisco, has 1,094 employees, according to city documents.

Mayor Irma Anderson and Jay Corey, the acting city manager, acknowledged that the budget picture was extremely bleak.

Both, however, said the city would avoid bankruptcy.

"Unfortunately, the city of Richmond is not unique in its fiscal condition," Anderson said. The deficit is "more acute this year due to a number of factors, including great losses in revenue and aid from the state over the past several years."

The $35.2-million shortfall in the mid-year budget assessment is nearly four times the $9.5-million deficit figure discussed by the mayor and City Council as recently as December.

Amid a sense of crisis, the city hired a number of consultants to develop a so-called action plan -- including a series of fund transfers and accelerated debt repayments from various sources, such as the city's redevelopment agency -- intended to help cover the shortfall.

But even if all the consultants' action-plan recommendations were accepted by the City Council, the city would face a $7.1-million deficit that it must, by law, close by June 30, said Margaret Sheneman, an attorney working for the city.

To help bridge the remaining deficit, the city is appealing to its employees to help by contributing 8% to 9% of their pay to cover the "employee" portion of their pension costs. Many other cities and counties and virtually all private employers require their employees to pay all or part of their pension costs, Richmond officials said.

Such an agreement "would reduce the number of employees who would need to be laid off immediately," according to the action plan.

Reaction from city union leaders was negative. "It's a horrible situation," said Dan Colvig, a city firefighter and business agent for the firefighters union. "There are only 70 active-duty firefighters left in this city, so don't come looking to us to solve their $7-million problem."

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