Berkeley city officials are trying to claw their way out of a $12.5 million budget hole that could deepen when state and federal cuts are finalized. City leaders already are approaching employee unions to negotiate significant concessions. And overall, the Health Services Department and Housing and Community Services Department, which are dependent on state and federal money, could be the hardest hit.
Depending on what happens in the US Congress, Berkeley expects to lose between 7.5 to 62 percent of its federal Community Development Block Grant program funds, which finance emergency shelter, Alzheimer and disabled services, vocational training, and other services for the most needy. At a budget meeting last week, Councilman Max Anderson summed up the city's frustrations with the federal government's priorities and the difficult cuts the city will face: "We're fighting wars around the world that are sapping resources and the life blood out of the economy. We're facing a historic maldistribution of wealth in this country. We have the unhappy task of trying to negotiate these treacherous waters."
The biggest budget hurdle for the city is the cost of public employees, who account for about 77 percent of the city's total expenses. Berkeley's total annual budget is $318 million, while its unrestricted general fund amounts to $146 million. Although public-employee medical and retirement costs have increased exponentially over the last decade, the city continues to pay full medical and pension benefits, with the exception of police, who contribute 9 percent to their retirement plan. Mayor Tom Bates noted that medical benefits for a family of two cost the city around $400 per month just eight years ago, when he became mayor in 2003, while today those benefits cost more than $1,000.
The city is currently in contract negotiations with its police union and, according to budget manager Teresa Berkeley-Simmons, has written letters to its other labor unions, calling on them to reopen their contracts. Negotiations will likely center on tradeoffs — reducing compensation to avoid layoffs.
Over the last two years, the city has reduced its work force by about one hundred positions, mostly by attrition. In the next two years it will have to shrink by about one hundred more, City Manager Phil Kamlarz said. About half of those positions are already vacant, leaving fifty people who could be laid off.
City employees, over the last few years, have voluntarily taken furlough days. Last year furloughs saved the city $2 million, Kamlarz said. But reducing work days any more will greatly impact services and there are few vacant positions that can be eliminated, he said.
Housing and Community Services Director Jane Micallef said her department is doing some rearranging in order to maximize the federal funds it will receive. For example, it's terminating current programs for seniors at the West Berkeley Senior Center. She underscored, however, that "the north and south Berkeley senior centers will continue to offer social events, outings, classes and a hot lunch" to the West Berkeley seniors. And the city will transport them to the other centers. The West Berkeley center has the lowest participation rate of the three centers, Micallef said. But the center will become a hub for individualized senior services, such as coordinating healthcare, meals, and social programs for elderly individuals. Unlike senior center activities, these services are reimbursed by MediCal.
Still, the community services department likely will have to lay off seven people over the next two years, Micallef said. "Revenue reductions of this magnitude cannot be addressed without meaningful changes to the way we provide services and cannot be made without impact," she said.
The Health Services Department could lose as much as $3.5 million from state and federal cuts. Threatened programs include the Berkeley High Clinic, homeless outreach, alcohol and drug services coordination, mobile crisis intervention, black infant health, hypertension screening, health disparities initiatives, and enforcement of the noise ordinance. The department is planning to reduce staff by twelve in the coming fiscal year.
The police department currently has a number of vacancies, but Chief Michael Meehan said he is reluctant to hire people that he may need to lay off. Consequently, officers are working overtime, he said. "That is not sustainable," he added. He plans to budget for five fewer police officers and reduce the number of civilian employees, including parking enforcement personnel. He also said he is looking at what the department would save by closing the city jail.
But Councilman Gordon Wozniak has called for more drastic solutions. "Can we do a salary freeze?" he asked at last week's meeting. "The federal government has a salary freeze. It's not very popular, but it spreads the pain." Wozniak also suggested further civilianization of the police, particularly for nonviolent crime investigations.
Future work sessions will look in more detail at various departments' cost-cutting plans. The council likely will finalize the budget in June. Bates described the budget process as painful. It's like "amputating your legs with no anesthetic to save your life," he said. But "we have to make these horrible cuts."