RICHMOND -- Using creative financing approaches to paper over a multimillion-dollar deficit, the City Council passed a fiscal year 2014-15 general fund budget this week that is in the red by roughly $6 million despite cuts to public safety and other services and funds drawn from the city's port.
"We're using a balanced account theory with this budget," City Manager Bill Lindsay said. "We think it's OK for you to look at this in a multiyear context. That is the philosophy we are taking."
The budget passed 6-1, with Councilman Corky Boozé dissenting.
Lindsay said the budget is imperfect, with expenses of $140 million and revenues of about $134 million, but maintains a reserve balance of $12.25 million after drawing it down to close the budget deficit.
"It's not balanced because if you keep drawing down your reserves, you'll eventually run out of money," Lindsay said.
The new numbers represent significant progress since last month, Lindsay said, as department heads crafted plans to reduce their budgets by 17 percent each. The preliminary budget approved Tuesday includes deep cuts to public works, police, fire, the library system and recreation department. Some of the reductions come from the loss of about 30 public sector jobs through layoffs and eliminating positions after impending retirements.
Police Chief Chris Magnus said his department will be shaved by $2.3 million, mostly in cuts to the overtime budget and freezing eight sworn positions, and will impact public safety.
"It could take us several hours to respond to a lower priority call," Magnus said.
In addition to about $12 million in cuts, Lindsay also plucked $500,000 from the city's gas tax -- typically earmarked for road maintenance -- and $1.1 million from the city's port to help close the gap.
Lindsay admitted that the budget remains a struggle but stressed the damage of more cuts to balance the budget would not easily be restored. The city's biggest hit came from an unexpected 14.6 percent drop in property tax revenues last year, due in part to a destructive fire at Chevron's Richmond refinery in 2012, making Richmond the only city in Contra Costa County to see a decrease in property tax revenues at a time when housing prices are on the rebound.
But Lindsay has said a $1 billion modernization project at the refinery, which is scheduled to get a Planning Commission vote this month, could generate more than $3 million in new tax revenues if approved. Also, new assessments released by the Contra Costa tax assessor this week show a 9 percent increase in valuations in the city, portending an increase in tax revenues next year.
"In an era of revenues that are still in an unstable stage, like property and sales taxes, what we want to try to do is take an approach where we are fiscally sound in terms of a multiyear perspective," Lindsay said. "Our reserve helps us maintain some stability; we feel that we are right at the edge of going over and cutting some real significant core services."
The fire department absorbed $1.2 million in cuts to its overtime budget, which made headlines this week when this newspaper revealed that 24 Richmond fire captains combined to receive $2.2 million in overtime in 2013.
Fire Chief Michael Banks blamed the ballooning overtime pay on short-staffing, which he said has been shored up this year.
"Our staffing levels are in a good place now," Banks said.
Other cuts include about $500,000 in equipment budget reductions for the fire department, $313,000 from the planning department, $300,000 out of the police department's closed-circuit television surveillance program, $120,000 out of the library system and $211,000 out of the parks and recreation budget.
Not all the news was grim.
Council members directed Lindsay to restore a planned $150,000 cut to an after-school program for underprivileged youths. A $395,000 cut to the city's public arts programs, recommended last month, was also averted. In a last-minute addition, Councilman Tom Butt inserted $10,000 into the budget for a stop sign on 35th Street.
But the new budget has more hurdles. Lindsay said he needs more concessions from public unions, including givebacks and deferrals of sick leave, vacation, professional development and salary raises. Lindsay acknowledged that more job losses might be forced if he doesn't get concessions from the unions.
Boozé, the lone dissenter, decried the budget, saying it left too many "loose ends."
Contact Robert Rogers at 510-262-2726. Follow him at Twitter.com/sfbaynewsrogers.