ALAMEDA -- The City Council on Tuesday will consider adopting a budget that calls for job cuts and structural changes within city departments to help offset deficits projected at $3.5 million for the upcoming fiscal year and $5.2 million for the following year.
The proposed $163 million budget also calls for leaving some jobs vacant and securing more money through increased parking fees to help make up the shortfall.
About 29 percent of the General Fund, which takes up about $66 million of the budget, will be kept as a reserve for the upcoming fiscal year under the plan that will go before the council. That reserve would drop to 25 percent the following fiscal year, however.
The move to adopt the budget follows City Manager John Russo asking city department leaders to suggest ways to cut their budgets anywhere from 1 percent to 5 percent. The proposed cuts include eliminating three positions in Russo's office and one in the City Attorney's Office, as well as two positions in human resources, according to assistant city manager Liz Warmerdam.
About $275,000 would be saved at the fire department as a result of not paying overtime that was previously budgeted, Warmerdam said, and an additional $456,000 would be saved at the police department through not filling seven vacant positions.
Other cost-saving moves include reclassifying some jobs, raising the city's business license processing fee to $25 and reducing purchases of fire department equipment and supplies.
Increasing parking rates is expected to generate an additional $375,000 for the General Fund, Warmerdam said. Raising the penalties for parking violations, which currently bring in about $600,000, would provide an extra $380,000.
City Councilman Tony Daysog noted that the budget does not reflect the fact that the city still faces a growing health care bill for retired employees -- a bill that eventually will come due.
"Something's got to give, ultimately," he said May 28, when the council reviewed the budget plan.
The city's unfunded retiree medical costs stand at about $89 million, Treasurer Kevin Kennedy said. The city also has put off about $300 million worth of repairs for streets, sidewalks and other infrastructure, he said.
"The perception is out there that if we balance the budget, then everything is great," Kennedy told the council. "It does not really tell the story that we all know -- and we have talked about this many times -- about what's below the surface."
The money earmarked as a reserve in the General Fund would only cover a fraction of those costs, even if the council opted to use it to pay for them, he said.
City officials say they are working to address ongoing budget problems, including through changing what benefits are offered for new hires. But Controller Fred Marsh also said cities throughout the state are wrestling with the same issue.
"It's not going to be resolved overnight," he said.
Reach Peter Hegarty at 510-741-1654. Follow him at Twitter.com/Peter_Hegarty.
The Alameda City Council will meet at 7 p.m. Tuesday in the council chamber at City Hall, 2263 Santa Clara Ave.