The city manager’s office sent out 14 layoff notices to Morgan
Hill employees in recent weeks, and more could be coming as city
staff and council members hope to trim a growing deficit by June
30.
The city manager’s office sent out 14 layoff notices to Morgan Hill employees in recent weeks, and more could be coming as city staff and council members hope to trim a growing deficit by June 30.
City Manager Ed Tewes declined to name the employees who received layoff notices or list the positions they hold, which would be eliminated only by council approval sometime in the next two months.
More details about the potential layoffs will be presented in time for the next council meeting May 18 when city staff present a recommended budget for fiscal year 2011-2012, which starts July 1.
“Final action on any layoff will depend on the council’s final budget decisions about the city manager’s recommendations or alternatives for reducing the budget,” Tewes said in a statement about the layoff notices. “The actual number of employees who may be impacted will depend on those council actions, the personal decisions by the affected employees, and the potential for ‘bumping’ less senior employees in the process.”
For the third year in a row, the city’s general fund will require significant service cuts due to declining revenues from sales, property and hotel taxes. The cuts will affect residents as well as city employees, Tewes said.
The recommended local cuts will be presented to the public in depth at an open house workshop May 26 at the Community and Cultural Center. City staff will conduct the workshop from 5:30 to 8 p.m., and will be on hand to answer questions and discuss the budget process, as well as the reasons for the recommended service cuts with concerned or curious residents.
Last year, the city council cut about $1.5 million from the general fund, bringing the fund’s total budget to about $25.9 million. Those cuts included the elimination of about 13 positions.
The city’s animal control officer, Daniel Pina, is the only public safety officer to have received a layoff notice so far, according to police chief David Swing. Two other employees in the department were notified they could be “bumped” by more senior city staff who might lose their jobs, but retain the right to take a lower-classified job through the city’s complicated layoff policy.
The loss of Pina’s position will be burdensome to the police department, as other officers would have to assume his duties, which include responding to mountain lion sightings, aggressive or loose dogs, negligent pet owners and other calls relating to nuisance or uncared-for animals.
“It would require an officer to respond to incidents they don’t currently respond to,” Swing said. “We have an obligation to provide animal control services, but the community could expect an appreciable loss in service because of the loss of that position.”
Pina’s position was on the chopping block in the staff-recommended budget about this time last year. However, days before the council’s vote on the budget the Community Services Officers Association, which represents Pina and about 18 other non-sworn police staff, agreed to give up scheduled future raises in order to save Pina’s job.
Swing declined to name the two MHPD employees who received recent “bumping” notices because the effect of the budget on their jobs is less certain.
Last year was the first year of substantial cuts during the Great Recession for Morgan Hill, while other nearby cities such as Gilroy suffered first from the general economic woes that have hit everyone. In 2008-2009, for example, the Gilroy council laid off more than 40 city employees but has amassed a $21.4-million budget reserve.
Morgan Hill city council members have attributed their budget’s resilience to the city’s “sustainable budget strategy,” which allows a limited level of deficit spending each year but requires the reserves to stay at a minimum of 15 percent of annual general fund expenditures.
But new challenges beyond local control have arisen in recent months.
Adding to the struggle for the first time this year is growing financial trouble in the city’s water fund, which is suffering from a $1.6 million deficit as of June 30 due to dwindling consumption, city staff have said.
As the water fund is financed almost solely by rates paid by the city’s 14,000 customers, these difficulties will likely cause those rates to go up.
Plus, staff and council members are worried about the state’s potential elimination of the redevelopment agency.
Redevelopment money, financed by local property tax revenues, not only has paid for substantial public infrastructure and facility projects such as the Centennial Recreation Center, Third Street, Aquatics Center and library; it also provides the wages and benefits for the equivalent of 16.5 full-time city employees who manage and plan RDA projects.
It is still unknown what the state will do with RDAs, but Governor Jerry Brown’s state proposal to bridge a $25 billion deficit earlier this year called for the diversion of RDA revenue to basic state and local services such as education, public safety and social services.
If the RDA is eliminated, it would leave a $3.3 million hole in the city’s general fund – far larger than the $2 million or so deficit closed last year.
The layoff notices presented to 14 employees this month reflect the council’s support in recent months for the consolidation of staff and services in the community development and city manager’s offices, Tewes said.
That includes the hiring of assistant city manager Leslie Little in January, a new position created to oversee public works, engineering, planning and development services.
Also, in March the council approved a concept to eliminate two existing vacant positions in city hall’s human resources division, folding them into one newly created human resources manager’s title. In recent years, that division has shrunk from four employees, and the proposal approved in March whittles that number down to two.
The consolidations reflect recent city practices of trying to lower costs in part by reducing the number of high-paid department-head positions, city staff said.
The council will conduct a public hearing on the budget June 1, followed by an all-day workshop on the budget June 3. The council plans to adopt a budget for 2011-2012 by June 15.
