Against a backdrop of a loss of property taxes and redevelopment dollars and the rising cost of employee pensions and benefits, the El Cerrito City Council passed a 2012-13 budget Monday evening that it hopes to balance with three areas of targeted savings.
The city will save $250,000 from an agreement with police and firefighters to forgo a 2.1 percent cost-of-living adjustment. It will also make two years of pension payments for an as-yet unidentified group of senior employees in return for their agreeing to retire, for a savings of $150,000.
The city also hopes to save $84,000 in pension and health care payments through negotiations with the Service Employees International Union that represents its non-safety personnel.
El Cerrito is proposing that non-safety employees increase their pension contributions from 1 percent of salary to 4 percent. The city now picks up 7 percent of the required 8 percent of salary contributed to the California Public Employees Retirement System each year,
The total savings from the three actions will turn a projected $314,000 deficit into a surplus that will fulfill the council's goal of increasing its reserves to at least 10 percent of its annual budget.
"We're trying not to cut services and looking for flexible ways to cut long-term costs," City Manager Scott Hanin told the council. "There's a good chance we'll be struggling year-over-year for awhile."
Hanin promised to provide the council
While police and firefighters have agreed to go without cost-of-living raises and the pension buyback savings seem assured, SEIU is objecting to paying more for pensions and benefits and is demanding that the city instead eliminate a car allowance for management employees.
Negotiations between the city and the union are ongoing.
Union members' pay has remained flat since the recession began in 2008, said Millie Cleveland, worksite organizer for SEIU, Local 1021, which represents recreation workers, custodians and other personnel.
"All our members are dealing with extra workloads with no increases in compensation, while management gets extra pay for extra work," Cleveland said. "We cannot go back to the bargaining table with this budget."
In other action, the council agreed to take advantage of record-low interest rates by refinancing leases for fire trucks, recycling trucks and carts, as well as a lease for the construction of its new recycling center.
It will also refinance storm drain revenue bonds.
The equipment and recycling center refinancings are projected to save about $251,000, while the storm drain refinancing will give the city about $534,000 it can use for new capital projects.
Finally, the council named volunteers and community activists Jane Bartke and Amy Shinsako to the City Council Wall of Fame in acknowledgment of their contributions to the city.
The induction ceremony for Bartke, a former councilwoman, and Shinsako, a longtime teacher and volunteer at Harding Elementary School, will take place at the Aug. 21 council meeting.