City Administrator Tom Haglund sent out 44 pink slips Monday, a
formality following verbal notices and the council’s approval of
layoffs earlier this month.
City Administrator Tom Haglund sent out 44 pink slips Monday, a formality following verbal notices and the council’s approval of layoffs earlier this month.
“This is nothing new other than it is the official notice,” Haglund said Monday.
The move will save the city $3.3 million this fiscal year and $6.7 million next year. Haglund will also present the council with additional project and service reductions at the body’s Dec. 15 meeting that will achieve the $1.5 million in additional savings the council requested by the end of the next fiscal year.
The 44 employees – or 16 percent of City Hall – have until Jan. 31 to clear their desks or “bump” a subordinate employee. Colleagues will discuss their options in the month to come.
“One of reasons we issued the notices now is to provide employees with enough time to determine their bumping rights,” Haglund said.
Earlier this month, the city council told Haglund to consider delaying more projects and employee raises, seeking more revenue and reducing hours in addition to personnel cuts, but it also gave him the final authority to deliver layoffs.
Councilwoman Cat Tucker was the only one to vote against the layoffs Nov. 5, and she and Councilman Peter Arellano also voted against the Jan. 31 layoff deadline. But the two joined all their colleagues in separate votes to delay additional infrastructure projects and to cut the additional $1.5 million in expenses the council will consider Dec. 15.
Haglund said repeatedly that layoffs are necessary to prevent the city’s general fund reserve – which held $26 million a year ago – from shrinking to $4.1 million by June 30, the end of the fiscal year, and to negative $12 million a year later. Staff recently predicted the city’s general fund deficit will grow from $3.9 million to $6 million this year and from $3.5 million to $7 million next fiscal year thanks to shrinking tax receipts, employee compensation costs that have risen steadily throughout the years and a practical standstill in fee-generating development that pays for major infrastructure costs.
The main reasons for the reserve fund’s precipitous decline, Haglund said, are the need to cover ballooning deficits, the cost of buying back various securities that have since incurred higher, unmanageable interest rates, and the price of ensuring that the city’s indebted fee-based funds – which paid $13.2 million for Gilroy Gardens and are running a $10 million deficit that will grow to more than $26 million in the red by 2011 – can still finance planned and contracted infrastructure and public facility projects, such as the sports and aquatics facilities at the new high school for which the city agreed to pay $6.5 million.
