The budget picture at Ceres City Hall continues to grow more and more ominous.
Since last year city officials have been in a budget-slashing mode but at the June 8 Study Session councilmembers learned that the city may be facing a huge expenditure at the worst time. Th city may be on the hook to contribute $1.2 million for the Stanislaus County Employee's Retirement Association (StanCERA), which took a hit from investment losses.
"The losses were so dramatic in such a short period of time that ... they'll try to make it up in a very short period of time," said City Manager Brad Kilger. "The $1.2 million is the worst case scenario."
Most cities are a member of the PERS retirement system but Ceres belongs to StanCERA.
City officials are hoping that StanCERA's losses can be feathered out over a number of years so that Ceres doesn't have to come up with the entire amount in one year, he added.
The news comes at a time when the city still must find $1.4 million to cut for the 2009-10 fiscal year.
The city has entered the third round of layoffs in order to pare down a projected $2.35 million deficit for the 2009-10 fiscal year. The shortfall will be made up of using $960,000 in reserves as well as more budget slashing measures - at the same time they are eliminating more department heads.
Due to a reorganization shuffle, the city has eliminated jobs that were filled by Human Resources Manager Keith Howes, Administrative Services Director Sarah Ragsdale and Executive Secretary Kathy Holloway. Holloway also served as deputy city clerk.
The city is reorganizing the Administrative Services Department and eliminating the HR manager into one Finance and Human Resource Division. The organization would have Administrative Services give up control of Information Technology to the city manager's office.
To conduct the business of personnel and finance - until a permanent director may be hired - Betina McCoy will be tapped to fill in. McCoy is the assistant to City Manager Brad Kilger.
The loss of the three key city people adds to the total of 17 who have received layoff notices.
The second round saw the elimination of Ken Craig, who was the Planning and Community Development Director. Eliminating the position saves the city $184,081 annually in salary and benefits.
The first round of personnel cuts came in February when 11 positions were cut. Among those issued pink slips were Planning Manager Barry Siebe, two planning technician, a part-time clerical aide in the Recreation Department, three jobs in the Administrative Services Department, a maintenance worker in the Public Works Department, a management assistant in the City Manager's office, and two community service officers and community relations officer Enrique Perez. Perez managed the Neighborhood Watch program as did trouble shooting with neighborhood issues.
The total of all city layoffs have saved the city $1.05 million annually.
For now, the council has backed away from eliminating the position of Recreation Department director. The plan was to downgrade the position of Doug Lemcke. City leaders don't see that as a wise move - even though a savings of $161,000 annually is anticipated - considering that the existing recreation staff would be hard pressed to manage recreation programs as well as run the new Ceres Community Center.
"I think that's perfectly appropriate (to wait)," said Kilger. "We're getting to the point where we are down to the bottom of our staffing."
Kilger said the public will start sees effects of the personnel reductions, such as longer lines.
"The public will not see any major, major impact on existing services overall. The next step could have an impact on how well our parks are maintained, the impact on recreation services."
Councilmen have told Kilger to look wherever he can to make cuts, preferably in non-personnel cuts.
Kilger is exploring the option of an early retirement system similar to one enacted by the city of Modesto. An option is to offer employees with at least 25 years of service a buy out of $1,000 per year worked, up to a maximum of $30,000. The city could pay out a potential of $427,581 for eight employees if they were to seize the incentive, with the promise of saving of $299,465 over four years.
"If there's seriious interest in it we'll probably talk about it at the next Study Session," said Kilger. "Cash buy-outs and the early retirements work for very large cities which have over a thousand employees ... in our case ... the overall savings would have to be realized over five years and it's not that much."
The city may also look at a politically unpopular option of raising fees for licenses or fines. Kilger said much more analysis would be required before the council could examine it.
Ceres' budget problems are also being impacted by the county's expectation that the city contribute toward the cost of the new Animal Shelter. The city's contribution to the shelter could cost $320,000.
Due to the recent failure to pass five budget-related propositions, Gov. Arnold Schwarzenegger said he will seek to "borrow" $2 billion from cities and counties, which would equate to a loss of $525,050 for the city of Ceres.
Since last year city officials have been in a budget-slashing mode but at the June 8 Study Session councilmembers learned that the city may be facing a huge expenditure at the worst time. Th city may be on the hook to contribute $1.2 million for the Stanislaus County Employee's Retirement Association (StanCERA), which took a hit from investment losses.
"The losses were so dramatic in such a short period of time that ... they'll try to make it up in a very short period of time," said City Manager Brad Kilger. "The $1.2 million is the worst case scenario."
Most cities are a member of the PERS retirement system but Ceres belongs to StanCERA.
City officials are hoping that StanCERA's losses can be feathered out over a number of years so that Ceres doesn't have to come up with the entire amount in one year, he added.
The news comes at a time when the city still must find $1.4 million to cut for the 2009-10 fiscal year.
The city has entered the third round of layoffs in order to pare down a projected $2.35 million deficit for the 2009-10 fiscal year. The shortfall will be made up of using $960,000 in reserves as well as more budget slashing measures - at the same time they are eliminating more department heads.
Due to a reorganization shuffle, the city has eliminated jobs that were filled by Human Resources Manager Keith Howes, Administrative Services Director Sarah Ragsdale and Executive Secretary Kathy Holloway. Holloway also served as deputy city clerk.
The city is reorganizing the Administrative Services Department and eliminating the HR manager into one Finance and Human Resource Division. The organization would have Administrative Services give up control of Information Technology to the city manager's office.
To conduct the business of personnel and finance - until a permanent director may be hired - Betina McCoy will be tapped to fill in. McCoy is the assistant to City Manager Brad Kilger.
The loss of the three key city people adds to the total of 17 who have received layoff notices.
The second round saw the elimination of Ken Craig, who was the Planning and Community Development Director. Eliminating the position saves the city $184,081 annually in salary and benefits.
The first round of personnel cuts came in February when 11 positions were cut. Among those issued pink slips were Planning Manager Barry Siebe, two planning technician, a part-time clerical aide in the Recreation Department, three jobs in the Administrative Services Department, a maintenance worker in the Public Works Department, a management assistant in the City Manager's office, and two community service officers and community relations officer Enrique Perez. Perez managed the Neighborhood Watch program as did trouble shooting with neighborhood issues.
The total of all city layoffs have saved the city $1.05 million annually.
For now, the council has backed away from eliminating the position of Recreation Department director. The plan was to downgrade the position of Doug Lemcke. City leaders don't see that as a wise move - even though a savings of $161,000 annually is anticipated - considering that the existing recreation staff would be hard pressed to manage recreation programs as well as run the new Ceres Community Center.
"I think that's perfectly appropriate (to wait)," said Kilger. "We're getting to the point where we are down to the bottom of our staffing."
Kilger said the public will start sees effects of the personnel reductions, such as longer lines.
"The public will not see any major, major impact on existing services overall. The next step could have an impact on how well our parks are maintained, the impact on recreation services."
Councilmen have told Kilger to look wherever he can to make cuts, preferably in non-personnel cuts.
Kilger is exploring the option of an early retirement system similar to one enacted by the city of Modesto. An option is to offer employees with at least 25 years of service a buy out of $1,000 per year worked, up to a maximum of $30,000. The city could pay out a potential of $427,581 for eight employees if they were to seize the incentive, with the promise of saving of $299,465 over four years.
"If there's seriious interest in it we'll probably talk about it at the next Study Session," said Kilger. "Cash buy-outs and the early retirements work for very large cities which have over a thousand employees ... in our case ... the overall savings would have to be realized over five years and it's not that much."
The city may also look at a politically unpopular option of raising fees for licenses or fines. Kilger said much more analysis would be required before the council could examine it.
Ceres' budget problems are also being impacted by the county's expectation that the city contribute toward the cost of the new Animal Shelter. The city's contribution to the shelter could cost $320,000.
Due to the recent failure to pass five budget-related propositions, Gov. Arnold Schwarzenegger said he will seek to "borrow" $2 billion from cities and counties, which would equate to a loss of $525,050 for the city of Ceres.
