BERKELEY — While California, facing a $24 billion deficit, is in a financial mess that will require a transformation in state government, the fiscal picture in Berkeley is much brighter, according to the 2009 State of the City speech given by Mayor Tom Bates on Monday night.

"These are difficult economic times like none we've experienced before. Things are in a free fall. I hate to pick up the newspaper because you don't now what's going to happen," Bates told an audience of about 100 at the newly opened David Brower Center in downtown Berkeley.

"The good news is the city is in good financial shape. We are not laying off one person and a lot of that has to do with (City Manager) Phil Kamlarz, who has been with the city for 34 years," Bates said.

Although Berkeley will not lay off anyone, it does stand to cut about $1 million to city health programs, according to a recent fiscal year 2010-11 budget update from Kamlarz.

What's more, Berkeley's biennial budget proposal says the city could eliminate 47 positions and make up to $5 million in cuts. Berkeley had a hiring freeze for several months so employees will not lose jobs but rather will be moved around or positions will be consolidated.

The state could also invoke a 2004 initiative that allows it to borrow property tax and sales tax revenue from local governments to be repaid with interest within three years. Under this plan, Berkeley could lose about $4.2 million to $4.8 million in fiscal year 2010.

Bates spent only a small portion of his one-hour speech discussing the fiscal situation. He used most of the time to laud the city's accomplishments, including the first-of-its-kind solar financing initiative that allows property owners to install solar energy systems by tacking the cost onto their property tax bills over a 20-year period. Seventy-five places are following Berkeley's lead and starting their own programs, Bates said.

Bates also touted the city's Climate Action Plan, which asks everyone in Berkeley to reduce their greenhouse gas emissions by 80 percent by 2050. Bates said he is doing his part by not driving, but rather walking about 10,000 steps (roughly four miles) daily to and from work and on other city and personal business.

In 2006, 81 percent of Berkeley voters approved Measure G. Since then, Berkeley city leaders have been working to hammer out a blueprint for getting residents and merchants to do their part to reduce global warming.

Bates said the plan has received nods from both the United Nations, which identified Berkeley as having the "best climate action plan," and the Environmental Protection Agency, which also lauded the plan.

Bates also pointed out that three Berkeley farmers markets have eliminated the use of plastic bags and packaging from the weekly events, making Berkeley the first city in the nation to do so.

The markets encourage shoppers to bring their own cloth bags and previously used paper and plastic bags.

Single-use high-density polyethylene bags can take from 400 to 1,000 years to break down, and their constituent chemicals remain in the environment long after that, market organizers have said.

Kristin Bender covers Berkeley. Reach her at kbender@bayareanewsgroup.com. Read the East Bay Outtakes blog at www.ibabuzz.com/outtakes.