With the go-ahead from the City Council on Tuesday, Tacoma’s interim city manager will move forward with a phased budget-slashing plan to close at least three-quarters of a projected $31 million budget shortfall by year’s end.
Then, early next year, city officials will determine where the 2011-12 general fund budget stands – and whether even more cuts will be needed.
“This gives us a more concrete target to shoot for,” interim City Manager Rey Arellano told the council after it agreed to his phased option of budget-cutting.
But Arellano warned there’s a big risk with the chosen “75 percent option”: If the current budget projections hold true, the council will need to cut even more deeply next year.
“The later you wait to make the cuts, the more expensive it becomes,” Mayor Marilyn Strickland said.
Arellano’s option to cut 75 percent of the projected shortfall was the lowest number of cuts recommended from among several choices he presented to council during the latest update on the city’s grim budget forecast Tuesday.
The preferred choice would close about $23 million of the projected $31 million budget gap – what Arellano figures to be the worst-case scenario for the city’s shortfall, based on current projections.
The plan likely would involve eliminating at least 203 city positions – achieved by a combination of laying off 126 employees, eliminating 68 current vacant positions and shifting about nine positions now covered by the general fund under other city funds.
“The idea is we’re moving away from holding vacant positions open to balance the budget,” city spokesman Rob McNair-Huff said.
Still, even when combining those proposed job cuts with other savings targeted through furlough days, pay cuts and other changes to nonunion employees’ compensation, the total number of reductions identified by Arellano only adds up to about $17.6 million.
Council members told Arellano on Tuesday not to assume they will agree to any of the eight options he presented last week, options that could garner up to $3.7 million in estimated new revenues.
Those ideas included such seemingly unpopular measures as jacking up city traffic fines and imposing a $20 city fee on new vehicle license tabs.
“I’m OK with phasing, so long as the $23 million (in cuts) doesn’t assume additional revenues,” Councilman Jake Fey said.
Without the new revenues, Arellano must still come up with $5 million to $6 million more in budget cuts to reach the 75 percent goal.
“That can be achieved in any number of ways – use of reserves, additional layoffs, other strategies,” Arellano said.
Under the plan, city officials would re-examine the budget by late January or early February to determine if the current forecast is right. If it is, timing would be important in closing any gap, because “the later you wait, the more drastic it is,” Arellano added.
Should the city still need to cut $8 million more, as the most conservative forecast suggests, the number of additional layoffs could escalate from 114, if the cuts were made in December, to 283, if made in May.
Still missing from Arellano’s latest update were any specifics about what city positions and services will be targeted. Several council members asked Arellano to provide such details as soon as possible.
Councilman Joe Lonergan said the lack of such details leaves a “cloud of uncertainty” hanging over city employees.
“When we’re talking about layoffs, we need to know when, where and how,” Lonergan said.
Providing as much information as possible, while still meeting city obligations under current labor contracts, is “a delicate balancing act,” Arellano said. He added more details could be given to the council during a closed-door session set for later Tuesday.
But fearing a time crunch to meet budget adjustments, Councilman Ryan Mello directed Arellano to begin scheduling public budget workshops.
“We need to give clearer budget direction for layoffs and cuts,” Mello said, “and I think a lot of that needs to happen in open session.”
Lewis Kamb: 253-597-8542
lewis.kamb@thenewstribune.com
blog.thenewstribune.com/politics
Twitter: @lewiskamb
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