Through several rounds of reorganization, a dip into the city’s reserve fund and the hope of substantial savings from employee contract negotiations, Davis looks to make considerable headway over the next year in paying for its many unfunded liabilities and unmet needs.
To illustrate those goals, City Manager Steve Pinkerton revealed for the first time at Tuesday’s City Council meeting the city’s fiscal year 2012-13 budget, which features several highlights that may come as a surprise during these tough economic times.
Perhaps the budget’s biggest achievement is that it projects that the city will be able to tack on almost $2 million in funding for street and bike path maintenance, a move that would bring the total allocated toward that “unmet need” up to $3.1 million.
According to Pinkerton, allocating funds to pay for these infrastructure needs now ultimately will save the city money in the long run.
“That’s at a level where we can keep up with our existing maintenance and start attacking the deficit that we have so that we can get our pavement management index up to a level that reduces our cost in the future,” Pinkerton said late Tuesday night.
Then, the contract proposals the city has on the table with bargaining groups — whose contracts all expire this month — would save the city more than $4 million. A total of $3 million would be from the city’s general fund.
Pinkerton said Tuesday that these efforts, though difficult, also will put the city in a better financial position.
“Through restructuing and MOUs, just as we assured you last fall, we’re at a point where we can cover these unfunded mandates and these infrastructure needs and still be able to provide service to the community,” Pinkerton said. “But (it’s) been done through a lot of hard work and a lot of pain.”
If all goes according to the city manager’s plan, Davis would reduce its staff by 29 full-time-equivalent positions over the coming year, dropping the city to 376 full-time employees, a level last seen 15 years ago. The city has slashed 15.5 percent of its staff over the past four years.
However, Pinkerton cautions that the city could see even more reductions in the future.
“We believe that’s just the beginning,” he said. “We’re going to continue to take a look at that during the current fiscal year. We’ve got additional studies that we’re looking at regarding different departments and additional areas where we can save money.”
The last measure the city has planned to free up some money is to dip into its reserves. Pinkerton proposes to drop down from the 15 percent reserve policy that former Finance Director Paul Navazio had implemented to about 9.5 percent.
Over the next four years, Pinkerton said the city will be able to bring that level back up to 15 percent.
“Our philosophy is the reason you have a reserve is, when times are tough and when you have needs, those are the times you go after your reserve,” Pinkerton said.
Overall, the budget lists $40.4 million in expenditures and $39.1 million in revenues for the city’s general fund, which is dominated by personnel costs, and an all-funds expenditure total of $145.37 million with $139.53 million on the revenue side.
Meanwhile, City Attorney Harriet Steiner announced Tuesday that the city lost its appeal with the Public Employment Relations Board.
The loss will make whole the Davis City Employees Association, which successfully argued that the city improperly imposed a contract on its members in 2010.
That award, which the city projected would cost between $800,000 and $1 million, will come from the personnel cost savings the city created by laying off nine DCEA employees last week.
The council did not have much opportunity to comment on the preliminary budget proposal, as it didn’t hear the item until just before midnight Tuesday. It will, however, have a full budget discussion and potentially adopt the budget at its next meeting June 26.
— Reach Tom Sakash at [email protected] or (530) 747-8057. Follow him on Twitter @TomSakash