Council prepares for budget cuts

CITY HALL — A projected $9.4-million budget shortfall for fiscal year 2008-09, together with a general-fund reserve that is $5.28 million less than previously thought, had City Council members on Tuesday warning of salary freezes, department cutbacks and a critical review of overtime pay as potential tools to close the gap.

The budget outlook came as the council and city executives prepare to draft a balanced budget in time for adoption on June 24, a week before the start of the new fiscal year.

“We have quite a bit of work to do,” Councilman Frank Quintero said.

Even with a revised $2.39-million reserve and robust overall economic position — including a high credit rating and a $500-million investment portfolio that continues to perform strongly — City Manager Jim Starbird acknowledged that the City Council would face “considerable challenges” in balancing ongoing revenue with persistent community demands.

Those demands are projected to grow to $174 million next fiscal year on revenue of $164.6 million, creating a $9.4-million gap, according to a city report.

“A lot of effort will have to be made in the next few weeks to bring those in line,” Senior Internal Auditor Bill Fox said.

Starbird has already placed a moratorium on recruiting for existing vacant positions and has asked city executives to prepare plans on how they would cut 5%, 7.5% and 10% from their respective departments.

Councilman Bob Yousefian also asked the city attorney’s office to evaluate the possibility of reopening labor contract negotiations with employee unions as a way to stave off any planned raises until the city rides out the economic turbulence.

Yousefian also gave the first warning that overtime pay would be scrutinized heavily as various department heads presented their budgets this year, lumping the pay in with the sort of “frills” that should be the first to go in uncertain economic times.

Several self-styled community advocates have heavily criticized the Glendale Fire Department over the past six months for refusing to deviate from a staffing policy that the critics argue perpetuates millions of dollars worth of overtime hours a year.

While the detailed critiques received a lukewarm response from the city several months ago, Mayor John Drayman said they had become the “white elephant” in the room as the city kicked off its first budget study session.