The city of Sacramento announced Friday it is trimming its work force by more than 9 percent and, in an effort to avoid massive layoffs, it is offering buyouts to as many as 200 employees.
Assistant City Manager Gus Vina said the city has eliminated 204 jobs through a hiring freeze, attrition, layoffs and other measures. But to stanch its fiscal hemorrhaging, the city intends to eliminate about 300 more jobs and make cuts in service.
Now, with the potential of more layoffs looming, the city and labor unions have proposed an employee buyout plan, hoping up to 200 workers will voluntarily give up their jobs.
"The city has a number of tools for balancing the budget, and creating vacancies is one of them," Vina said. "This will help us avoid warm body layoffs."
The City Council next week will be asked to approve the buyout plan.
So far, the prospect of large government layoffs in the region is limited to the city of Sacramento.
"Golden handshakes will be part of the equation" in El Dorado County, said Senior Administrative Analyst Mike Applegarth.
But officials in Sacramento, Yolo and Placer counties, as well as the cities of Roseville, Davis and Yuba City, all reported they expect to cover their respective deficits through combinations of attrition, hiring freezes and fee increases for government programs.
Vina, however, said he doesn't believe that the city of Sacramento stands alone.
"We've gotten a jump on this," he said. Other municipalities in the area "will have their most difficult decisions around the corner."
In the fiscal year beginning July 1, the capital city is facing a $58 million budget shortfall in its $450 million general fund, Vina said.
The city's financial crisis is caused by unexpectedly low revenue and escalating costs, budget officials said. Sales tax revenue is below estimates. Also, the downturn of the housing market and rising unemployment are likely to mean a significant slowdown, or even a loss, in property and utility users tax revenue.
All told, the city has 5,274 authorized full-time positions, with 3,932 being paid from the general fund. About 13 percent of the general fund jobs are being eliminated.
If approved, city workers with at least five years of continuous city service would be eligible for a buyout, with priority given to workers who have been at the city for 10 years or more. The city is offering one week of pay for each year worked, with a cap of $50,000.
To pay for the buyouts, the city said it could afford to use up to $7 million of its $25.5 million reserve fund, Vina said. The city anticipates it will save up to $13 million in the first year and $20 million in future years.
Aaron Donato of the Sacramento Police Officers Association said the program is likely to attract employees on the cusp of retirement.
Three of the city's biggest unions have approved the buyout plan: the SPOA, Stationary Engineers Local 39 and Sacramento Area Fire Fighters Local 522.
While the buyout program would give the city some needed economic relief, Donato said he worries that too many police and fire employees may decide to leave.
"I'm very concerned about the safety of the community, and the safety of the officers working the streets," he said.
Employees will be given a small window to opt for the buyout, from March 5 to March 28. They must agree to leave their city job by Dec. 31.
City Manager Ray Kerridge has said he'll review all buyout applications and ensure that there isn't a significant drain from a single department.
As buyouts are considered, other cost-cutting measures have been taken or are under way.
The city's Development Services Department in February gave pink slips to 28 full-time employees. Kerridge has told departments to cut travel and other unnecessary expenditures, and has asked each department to put together plans to cut from 10 percent to 20 percent of its budget.
Assistant City Manager Marty Hanneman said half of the laid-off employees have been transferred to vacant posts in departments that aren't paid from the general fund. The other 14 people "haven't found a new home," Hanneman said.
The city is helping them write résumés for other city jobs. If they meet minimum requirements and decide to take another post, the city will provide on-the-job training if it is needed, Hanneman said.
As the cuts are made, impacts to city services are inevitable, Vina said.
"We just don't know where, and we don't know to what extent," Vina said.
In March, the City Council will be asked to prioritize cuts. Also, seven community forums will be held to get residents' input.
Sacramento Police Chief Rick Braziel has stated that reductions in patrols aren't expected for at least 14 months. Residents can expect, however, that it will take longer for police to investigate property crime cases.
Fire Chief Ray Jones has said it is possible that stations will not be fully staffed at times.
Neither Jones nor Braziel was available for comment Friday.
Labor costs make up about two-thirds of the city's general fund budget. About half of the city's workers are in the Police and Fire departments, Hanneman said.
Cutting 10 percent from public safety would mean $12.5 million from the Police Department and $9 million from the Fire Department.
"That gives you some idea about the magnitude we're talking about," Vina said.
Call The Bee's Terri Hardy, (916) 321-1073. Staff writer Todd Milbourn contributed to this report.
