HAYWARD | Mar. 7, 2012 | "Thanks, I guess," Hayward Councilwoman Barbara Halliday drolly said Tuesday night as the city's finance director again forecasted a budget shortfall of nearly $14 million for the next fiscal year.
The grim news follows a steep round of cuts last year to employee wages and benefits used to shore up a $20 million deficit. Several employee unions accepted across-the-board 13 percent payroll cuts that erased over $12 million of the shortfall last year.
Earlier in the meeting, the city's non-union managers agreed to a new contracts estimated to shave just over $1 million in savings during the next fiscal year, which begins at the end of June. In addition, Hayward City Manager Fran David warned of "staff shrinkage" stemming from the dissolution of its redevelopment agency earlier this year.
Finance Director Tracy Vesely told the council Tuesday night that the current projected budget for 2012 is nearly on target. She reported a budget just over $750,000 off her projections last year. "It makes our job a little bit easier when you're that accurate," said Councilman Marvin Peixoto.
The hard part, though, may come in the next few months as the council searches for solutions likely to include additional cuts to wages and benefits and city services. Mayor Michael Sweeney indicated the solution may again rest on city employees.
"These numbers are real and their impacts are real and everybody has worked very hard in the community, the council and at the staff level to hold things together for several years now," said Sweeney.
"We need employees to continue to step up and make concessions. Unfortunately, we've had to engage in concession bargain for the last four or five years and that's hard. It's hard on the employees. It's hard on everybody, but it needs to be done.
"We're all in this at the end of day. It's all about protecting services and protecting jobs. We need everybody to step up and do their part even though its hard."
Much like every other East Bay city facing a longer than usual stagnant local economy, Hayward is no different. Vesely expects similar property tax receipts at around $36 million; down over $4 million from three years ago and sales tax revenue to increase by a tick to $26.3 million in 2013.
Property transfer taxes are also expected to remain flat at $3.6 million next fiscal year. The amount represents half the amount in revenue the city took in property tax revenue in 2007--the year before the bottom dropped out on the local housing market. David said the city's newest big box retailers like Costco and Target helped stabilized the city's sales tax numbers.
Peixoto said he believes people are eshewing big ticket purcashes from neighboring Costcos in cities with higher sales tax percentages in the double figures in favor of Hayward. Nearby San Leandro has a 10 percent sales tax and a Costco on Davis Street. David said she believes there is some credence to that belief.
The city council continues to register tough talk towards Sacramento lawmakers they believe are making their jobs at the local level increasingly more difficult by repeated takebacks to solve the state's annual budget woes. Councilman Olden Henson lamented, "We can manage our problems if we're left alone."
Henson, who is up for re-election this June, then asked David if any new revenue-shifting plans from Sacramento were on the horizon. "I don't speak for the state of California," said David, "but I always assume they're looking for something else."