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Press Contact:
Cisco DeVries
(510) 981-7103

FOR IMMEDIATE RELEASE
November 20, 2003

MAYOR BATES, COUNCIL MEMBERS INTRODUCE
BUDGET CRISIS RECOVERY PLAN

City to take steps to address next year's $10 - $15 million deficit.  Mayor Bates joins with Council Members Maio, Hawley, and Wozniak in proposing emergency budget package to reign in city expenses.

Berkeley, CA – In a serious effort to grapple with the City’s deficit, Berkeley Mayor Tom Bates and three members of the City Council are introducing a Budget Crisis Recovery Plan.  The Crisis Plan comes before the Council on Tuesday, Nov. 25^th.

As part of the budget balancing strategy, the Council has been debating the placement of a $7 million parcel tax measure on the March ballot.  However, with an annual deficit that is forecast to grow to $19 million in 2009, the City must take steps to reign in spending regardless of the outcome of the ballot measure discussion and vote.  The Budget Crisis Recovery Plan takes immediate steps to reduce expenditures and presents a number of specific steps to bring the budget back into balance.

The Crisis Plan includes the following:

1. Prepare final cut lists.  The Council will commit itself to approving final cut lists in February so all Berkeley residents know exactly how the budget will be balanced with and without additional tax revenue.  As part of that review, all currently vacant positions should be reviewed for possible immediate elimination.

2.     Adopt the “Hard Hiring Freeze” as Council policy.  No hiring will be allowed except to fill revenue-generating positions, jobs funded with outside grants, or as necessary to protect public safety.  Exceptions to this can be made only by the City Manager with a report to Council.  

3. Place a moratorium on all new expenditures.  No new program will be initiated by the City Manager or the City Council that requires funding not already explicitly budgeted.  All general fund capital expenditures that have not yet been approved by the Council will also be frozen.  All on-going city expenditures should be evaluated to asses whether they could be postponed or cancelled.

4. Institute “City Savings Award” for employees.  The City Manager should develop and implement a program that provides significant incentives to city employees who come up with expenditure reduction ideas that succeed in saving the City significant funds.  These incentives can be a bonus, free parking for a month, or some other form.

5. Aggressively pursue cost recovery from non-profit landowners.  With over 35% of Berkeley’s land held by non-profits, the City should re-double its efforts to look for ways to recover city costs resulting from those organizations.  The City Manager should schedule a special work session of the City Council to examine options for greater cost recovery.  This session should examine large non-profits – like UC Berkeley and Alta Bates – as well as smaller non-profit organizations. 

6. Recover “escaped” taxes and fees.  The City Manager (or the City Auditor, if appropriate) should expedite a thorough review of all current tax and fee collection processes.   This review should include an effort to uncover taxes and fees that have not been levied as well as taxes and fees that were levied but not collected. Recommendations should be made on ways to improve collection or to create incentives for those with unpaid taxes to come forward and pay them.

7. Institute immediate labor savings programs.  The City Manager should quickly analyze and report back to Council on two immediate labor savings options proposed by three of our employee unions.  Those options included shutting non-essential city services during low-demand periods (for example from Christmas through New Year’s Day) and implementing a citywide voluntary time off program.

8. Continue negotiations on additional labor cost savings.  Less than two years ago, city employee unions signed a six-year contract.  This contract was in line with other cities in our region for pay and benefits.  However, given the size of our projected deficit, it is appropriate that the City and its employees examine options for achieving labor cost savings without resorting to major layoffs.  By law, the City cannot unilaterally re-open those contracts.  However, the Council and the City Manager commit themselves to working closely with the unions to develop labor cost savings and minimize layoffs. 

9. Launch a budget crisis education effort.  This education effort should include the City’s annual report, visits to community and neighborhood meetings, and the creation of a “Budget Crisis” website linked to the City’s homepage. 

 These steps will strengthen the on-going efforts to deal with the City’s severe budget crunch.  In the last two years, the City has cut over $6 million and raised roughly $2.8 million through increased fees and fines. 

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