HAYWARD -- Layoffs and additional employee concessions are on the table as the city faces a dire fiscal situation that will leave it $20 million in the red in the next fiscal year if nothing is done, according to the latest budget report.
The City Council will be hearing reports from various city departments over the coming weeks before adopting a finalized budget on June 21.
Recommendations include reducing city staff by 56 full-time positions, 32 of which are currently vacant. Because some employees might be moved into other slots that are open but not being eliminated, the city manager estimated 16 people would no longer be employed with the city.
Under the recommendation, the police department would be the hardest hit, with 16 positions slated for elimination. Twelve of those are sworn officers, who would not be replaced after leaving the department or retiring, according to the city report. Other proposed cuts include three in the fire department, eight in maintenance and 12 in public works. The reductions would add up to $5.2 million in savings.
David said that so far they've made informal agreements with some of the city's employee unions on concessions totaling about $8 million. Those givebacks include major ongoing changes to retirement plans, health care and promised raises.
All told, employees are being asked for a 13 percent reduction to their total compensation. This comes after two years of a 5 percent reduction,
"I told them at the time, you know that going forward, there's a real steep cliff ahead," said City Manager Fran David. "There was a commitment to 5 percent just as a means of getting (the budget) done at the time."
According to David's report, the 13 percent reduction has "presented a daunting picture" to employees, and "nonstructural, temporary sacrifices will no longer solve the problem: this is not a short-term problem wholly solvable through a recovered economy."
David said that going forward, a realistic view would require the city's $118 million general fund be chopped by at least a quarter. Within the general fund, $96 million goes toward employee salaries and benefits.
The latest projection is considerably worse than one from January, which predicted that the city would take 10 years to get to a $75 million deficit if nothing is done.
Hayward was hit hard by losses to property, sales and transfer taxes, which are down a total of $17 million compared with levels seen in recent years. Like other cities, growing costs of pension and medical benefits have exacerbated the problem.
"We'd like to protect our employee package as much as we can, we think it's decent, but we are going to need to share more of the costs with employees," David said.
The first scheduled budget presentation, from the fire and police departments, will be at 3:30 p.m. Tuesday at City Hall, 777 B St. Additional presentations and hearings will be held each Tuesday until adoption on June 21. For more information, go to www.hayward-ca.gov or call 510-583-4014.