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Before the holiday break, I got an update of sorts from Chula Vista City Manager David Garcia on his progress dealing with that city’s financial crisis.
Remember, according to Garcia not too long ago, the city was on the verge of insolvency. He called to say things had changed.
Garcia’s staff gained approval from the City Council to cut 140 city positions. But as Garcia admitted, only “about 10” city employees were actually going to say goodbye to City Hall. The others would find placement in a vacant post in the city.
The city may have been on the route to insolvency but shifting people into new posts has, according to Garcia, changed that.
To a point.
He said the city found itself still $1.3 million short after cutting those positions. Remember I wrote that Garcia was going to ask for concessions from Chula Vista’s employee unions. Garcia gave me a report of how that went.
He said all the unions agreed to forego the raises they expected this year for six months, in exchange the city agreed to give them a variety of little things. For the firefighters, for example, Garcia said the city agreed to kick them back one-fourth of their expected raise in one lump payment in exchange for them not getting the full raise for half the year.
I know, it’s a brain twister, but it apparently resulted in savings.
Chula Vista’s employees all signed five year contracts and they all expect raises well into the future.
So while Garcia may have saved enough money to make it through this year, it remains to be seen whether the city’s revenues will grow as fast as its employees’ salaries will.
As Garcia pointed out, Chula Vista spends about 80 percent of its budget on employee salaries and benefits compared to about 70 percent for most other cities in the region.
And the workers are expecting raises. Garcia said he couldn’t do anything to change that.
“For whatever reason, we entered into five year contracts that were very lucrative. I couldn’t undo them if I wanted to, the question is, how best to manage them,” Garcia said.
For the city to manage those rising salaries in coming years, one and/or two things need to happen. Either the money coming into the city will rise to meet the need. This can come from either a booming economy, or through increased taxes and fees. The city’s already boosted things like parking meter costs. In the absence of that, the city would have to go through cuts, ostensibly cuts that actually cut the number of people that actually work for City Hall.
With the housing market still bleak and the state declaring a fiscal emergency, the likelihood that Chula Vista’s going to see indefinitely rising revenues seems rather remote.
But Garcia wasn’t ready to worry about that yet. He said the opening of State Route 125 through South County was timely. The Otay Ranch Town Center, Garcia said, was filled with shoppers.
Maybe that meant things were changing for Chula Vista — a brighter future was on the way.
Garcia admitted he’d have to wait to see if the parking lot was full after Christmas before he got too excited with the idea that Chula Vista’s crisis was just a 2007 thing. If it’s not, moving around employees and putting off their raises just won’t cut it.