City tightens belt, passes balanced budget

DOWNEY - For the first time in three years, the Downey City Council on Tuesday passed a balanced budget, choosing to tighten its belt and cut spending while saving its reserves for potential emergencies down the road.The $135 million spending plan was unanimously approved, 4-0, with Councilman David Gafin absent. Council members overcame a $11.5 million deficit mostly through layoffs, early retirement options, employee benefit concessions and program reductions. The city also introduced reduced pension benefits for new employees, which is expected to save the city money as employees retire and are replaced with new workers. The City Council decided early in budget negotiations that it no longer wanted to rely on its reserves - which currently stand at about $19.5 million - to cover its budget shortfalls. "The last three years we have seen deficit spending and we've been tapping into our reserves hoping the situation would improve. It hasn't," said city manager Gilbert Livas. Relying heavily on union concessions to balance its budget, the city also laid off about 25 workers earlier this year, "uncharacteristic measures for Downey," Livas said. "To get from an $11.5 million deficit to zero is pretty remarkable," Livas said. As in years past, the majority of the city's General Fund - 71 percent - is dedicated to the police and fire departments. One of the few areas council members chose to increase spending was graffiti abatement, which saw its funding increase by more than $60,000. City officials are closely monitoring California's own fiscal crisis. If Gov. Jerry Brown's tax initiative is not passed by voters in November, the state could cover its $16 billion budget deficit on the backs of local governments, said John Michicoff, finance director for Downey. Michicoff did offer positive news, however. He announced that the final piece of financing for The View housing project has been secured and "we should see more activity on that site soon." He also touted Downey's 8.9 percent unemployment rate - the lowest among Gateway Cities with at least 50,000 workers - and praised the city's efforts to attract and retain new businesses who are investing in Downey, including Raytheon, Champion Fiat, the Marketplace Grill, Green Olive and La Barca. Council members on Tuesday took turns praising city workers for their willingness to bargain at the negotiating table. "Staffing levels in every department have significantly decreased," said Councilman Luis Marquez. "We couldn't have done this without the support of city employees. We prepared a budget without reducing the quality of life in Downey." Councilman Fernando Vasquez said controlled spending is important to a well-run city. "City government needs to live within its means," he said. Councilman Mario Guerra took a measured approach, reminding residents that "this is not a perfect budget." "Let's not kid ourselves, it's going to impact us," Guerra said, noting that the number of city workers dropped from 430 last year to 368 as of July 1. "We're asking our city employees to do more with less." The budget approved Tuesday does not include reductions in police officers or firefighters, Guerra added. "Our future is bright," he said. "I think we fixed some structural problems." City officials said a budget subcommittee composed of two council members will meet on a bi-monthly basis to monitor city spending.

********** Published: June 28, 2012 - Volume 11 - Issue 11