January 25, 2011
Salinas faces a $7 million budget shortfall next year, Mayor Dennis Donohue warned at a Jan. 24 City Hall news conference.
The City Council will vote Jan. 25 on whether to ask city workers to grant additional wage and benefit concessions to balance the 2011-2012 books.
Two years ago, the employees agreed to defer wage increases and health benefit contributions until 2011. Now, city officials say they won't be able to afford the $2.7 million the employees are due later this year. What's more, they argue that increases in health insurance costs, retirement and workers compensation amount to more than $4 million, which when added to the $2.7 million, accounts for the city's projected budget gap in 2011-2012.
By contrast, a report by city staff says Salinas is expected to end the current fiscal year in the black because it eliminated vacant staff positions during the year. If not for a $700,000 payment to settle a claim against the Salinas PD, the city would have ended 2010-2011with a projected $1.4 million surplus.
At its Jan. 25 meeting, the City Council is expected to vote to allocate the remaining $700,000. City staff recommend setting aside $400,000 for an operating reserve fund, adding $250,000 to the city's economic development efforts, funding volunteer services coordination and additional code enforcement, as well as paying $25,000 to evaluate the city's computer hardware, and funding security lighting and mandatory employee ethics and harassment training.