From The Sacramento Bee, January 30

SACRAMENTO, CA – Sacramento's financial situation has never been worse, a top city budget official said Thursday night.

Finance Director Leyne Milstein told the City Council that with the city facing a $50 million deficit, as many as 500 city jobs could be eliminated in the coming months, and some departments' budgets could be slashed by a third.

Some of the positions that might be lost are already vacant, but "avoiding layoffs will be nearly impossible," she said.

"It's not going to be easy," Milstein said at the council budget workshop. "This is unlike any other time that the city has faced."

City Treasurer Russ Fehr warned that without significant action, "we're going to eventually run out of money."

He said Sacramento has been in a recession for nearly two years and that the mayor and City Council were likely to make choices more severe than any since the Great Depression.

And this may be just the beginning.

Fehr said the economic climate might not improve until 2012. Budget officials have projected cumulative budget cuts of $150 million over the next four years.

For the fiscal year beginning July 1, the gap is expected to hit $50 million. Beyond eliminating jobs, the city also could decimate programs and services.

The police and fire departments have been asked to submit proposals to budget officials outlining what cuts of 3 percent, 7 percent and 10 percent would do to their levels of service.

All other departments were asked to sketch out what cuts of 15 percent, 25 percent and 35 percent would mean.

Budget officials will brief the council on those cuts at a hearing next month.

Most departments already were cut by 20 percent this year. The police budget was slashed by 8 percent and the fire budget by 4 percent.

Councilman Kevin McCarty raised concerns at the workshop that many city services would be hit at the expense of maintaining the public safety budgets.

"Our goal is to (balance the budget) and maintain our goal as a full-service city," Milstein said.

With severe cuts looming – and some cuts already in effect – police union boss Brent Meyer said the only thing left to slash from the police budget is officers.

"They're going to have to find the money somewhere, and I don't know if it's anywhere but warm-body layoffs," Meyer said. "When we looked at (the police budget) the last time, there was no fluff in there." He said budget cuts in the coming months could lead to the loss of up to 100 officers.

Police Chief Rick Braziel said earlier this week that Sacramento already ranks far below other capital cities in terms of officers per resident.

"Where we're at now, we don't have enough people to adequately police the streets the way the community expects them to," Meyer said.

Local 39, the union that represents about 2,500 city employees who are not with the police or fire departments, sent 500 petitions to the City Council this week urging them not to "compromise our quality of life in Sacramento.."

The petition noted that many non-police and fire employees – such as those who inspect buildings, keep the drinking water clean and maintain parks – also play an important role in keeping the Sacramento safe.

The city could save $18 million next year by freezing the salaries of non-management employees, Milstein said. The raises are part of contracts that expire in 2010.

Furloughs for all non-public safety employees could save another $6 million..

Top city officials have scheduled a closed session during Tuesday's City Council meeting to discuss negotiating labor agreements with the unions.

After receiving the budget figures, City Council members reacted grimly, some calling for all city workers – union and non-union – to make sacrifices, others suggesting they take a symbolic pay freeze themselves.

Councilwoman Lauren Hammond said the city's workers "have got to decide that we're all going to take a hit so we can keep as many people as possible."

"I don't want a pay raise this year," said Councilman Steve Cohn. "If we're going to be asking everyone else to sacrifice, I think it's appropriate" to forgo council pay raises.

To this point, the city has not requested that Local 39 – the city's largest union – open renegotiations, said Steve Crouch, the union's business representative.

"We have a contract until June 2010, and we expect the city to live up to the contract that's currently in effect," he said.

Crouch questioned the figure generated by raises, saying increases to Local 39 salaries will cost about $3.5 million next year.

City labor officials did ask the police union earlier this month to open contract talks. Four days after that request, Meyer sent a letter back to city officials saying the union had "no interest" in renegotiating.