City Manager Stephen Dunn presented his budget report to the City Council at a special meeting Wednesday, recommending the council give him direction for short-term and long-term solutions to help free up at least $2 million annually.
The council asked Dunn to prepare a list of savings estimates for long-term recommendations and bring it the Nov. 26 meeting.
"I will give you estimates on potential savings and I will also indicate that we can save this or not save this and whether or not the service level would decrease, stay the same or increase," he said. "I can present that and give you guys a little bit more of a broader picture, and at that point you can say push forward with what I'm recommending or not or make changes."
Dunn was going to bring proposals for ourtsourcing police and fire service to the council during the Nov. 26 meeting, but will wait until after the council gives him direction on the long-term recommendations.
The two short-term recommendations Dunn made were to cut $229,000 from general government, the city manager's office and development services.
The council also agreed on Dunn's recommendation to prepare to transfer $250,000 from the gas tax fund to the general fund if necessary.
The city's reserves have fallen from a projected $4.2 million to $932,000.
"We need to make sure we get that stopped. We cannot afford to get lower," said Mayor Ray Musser.
City leaders need to find more than $8 million to build the reserves to meet the city's policy of saving 10 percent of expenditures as well as to eliminate funds with a deficit balance, including animal services, self-insurance and general capital improvement funds.
The long term recommendations include exploring alternative ways to provide various city services such as fire, police, animal services, library, inspection services, fleet maintenance, information systems and engineering services.
Councilman Brendan Brandt, who is not in favor of outsourcing city services, asked that Dunn provide a bigger picture of what savings could result from the long-term recommendations in order to avoid making a mistake.
"We're all acutely aware that basing our decisions that are part of the long-term recommendations, we will never bring them back. I just know that," Brandt said. "I would not make those kind of decisions without having all the information reasonably possible."
Other long-term recommendations are:
- Selling the Fire Department's 100-foot ladder truck.
- Renegotiating the contract for the air ambulance.
- Running a paramedic0only unit out of Fire Station 2.
- Brown out a fire station to keep overtime costs down.
- Asking employees for concessions.
If all city employees agree to pay their share of their pensions, then the city would save $1.6 million citywide and $1.3 million in the general fund, Dunn said.
Dunn said he expects about $500,000 in new revenue in the next fiscal year.
The new revenue combined with the employees paying their own pension would provide $2 million in savings annually, he said.
However, Dunn is not convinced all seven employee groups will be on board with the concessions and not seek benefit or pay increases in return.
"We have seven bargaining groups and not all are going to be on the same page," Dunn said. "Some are going to be willing to work with the city more than others."
Dunn also recommended potential revenue increases such as asking voters in 2014 to agree to an increase in business license fees and possibly increasing some fees for services.
He said the council could agree to increase the sales tax, but it would require two-thirds of voters to agree and historically Upland voters have not voted for tax increases.
The council did not take any action on recommended revenue increases.
Councilwoman Debbie Stone wanted the council to agree to allow Dunn to prepare more information on the long-term recommendations.
"I just don't want to waste anymore time. We don't have the time to waste," Stone said. "We need to address this. We need to move forward on this and let staff get busy and get started on it."