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  Richmond at Budget Impasse - Massive Layoffs Projected
October 16, 2003

In July of 2003, I described Richmond’s 2003-2004 budget as a “Hail Mary Budget” (See http://www.tombutt.com/forum/030709.htm). Continuing the football analogy, it appears that there are no open receivers and the game will be lost.

The West County Times has done a good job of covering the most recent developments (See http://www.bayarea.com/mld/cctimes/content_syndication/local_news/7009551.htm and http://www.bayarea.com/mld/cctimes/content_syndication/local_news/7026987.htm . While there are a number of factors that leave the City with a nearly $10 million shortfall, the principal one is the fact that employee compensation, pension plans and health care insurance has skyrocketed. Richmond has fallen victim to the same factors that put the State of California some $35 billion in the red. Three years ago, during the dot com boom, we began negotiating and later adopted agreements with our public employee unions that anticipated the good times would roll on forever. See http://www.tombutt.com/forum/021215b.htm.

When the 2003-2004 budget was adopted, it was understood that only two courses of action would sustain it: (1) Cost sharing by employees of benefit costs, or (2) substantial reductions in force. There are some other contributing factors, including ChevronTexaco’s refusal to pay their fair share of the utility tax increase and delays in selling some city-owned property for development. From what the City Council has been told, the public employee bargaining units have so far offered to give up nothing, leaving massive layoffs as the only answer.

When we adopted the last major increase in pension plan costs, I asked the public employee union representatives what would happen if the City could no longer afford it. The entire transcript is attached as a PDF file.

Darrell Reese, apparently representing Police and Fire, replied,  “… there’s several very important ways that the City can protect itself long term and of course the best way to do that is…every two or three years, our contracts are opened and I think at that point the City has to analyze it’s financial situation and you’re doing that already.  You have to do that every contract time.  We live from contract to contract because of that, you folks always at the end of the day are in a position to say, wait a minute, things have gone out of control, sorry folks, sorry employees, you guys are going to have to take a cut, we have no choice, we have no money so you’re going to go bankrupt or whatever the situation may be.:

Marshall Walker, President of SEIU Local 790 responded, “Well, I agree with Darrell.  Number one, there’s always room when we turn around and start negotiating, we open up the process … Everybody has to get up and everybody has to go to work and everybody has bills out there and I’m reasonably sure that during the process of negotiations again – not saying that we’re going to take zero, but saying that we will be open to that Mr. Butt.”

I am attaching to this email a PDF file with the previously confidential list of layoffs recommended by the city manager. I am already getting questions from constituents wanting to know how we could consider decimating the Library and Parks and Recreation. Firefighters are demanding to know how we could consider reducing the Fire Department staff. And so on.

If anyone has any suggestions about how the layoff schedule should be revised but still provide the same level of budget reduction, please let me know.