By Doug Oakley
Bay Area News Group East Bay
Facing a sickly economy and weak tax revenue, Berkeley will lay off seven city employees in April, put off road repair and other projects and make cuts to city departments to fill a $1.8 million budget deficit, City Manager Phil Kamlarz said Tuesday.
The Police Department, which has been spared from budget cuts the past couple of years, likely will take a hit in the next fiscal year starting in July when the city will have to cut $11 million more, partly because of rising pension and health care costs and low tax revenue.
Pensions for retired city workers will cost the city about $32.7 million in fiscal year 2013.
By 2016, the total will rise to $41 million. Those numbers have risen from about $2 million in 2000, according to Berkeley Councilman Gordon Wozniak.
Specific ways to cut $11 million from the budget have not taken shape, Kamlarz said.
The city's $11 million deficit could grow if Gov. Jerry Brown's proposed state budget changes and voters do not approve his tax plan.
"Half the state budget is dependent on new revenue, and if that doesn't happen, it's back to the drawing board," Kamlarz said.
To balance the current $1.8 million deficit, Kamlarz will go to the City Council at the end of March with specific cuts to the mental and public health departments, the permit service center and the refuse department.
The city will also put off improvements to bike and pedestrian paths, road repair, and storm drain maintenance. The layoffs in the spring will come from departments across the board, but not from police or fire, Kamlarz said.
Like other cities, Berkeley is facing revenue shortfalls from such things as property tax, real estate sales transfer taxes, hotel taxes, sales taxes and parking fines.
At the same time, employee health care costs for Berkeley employees have risen 11 percent each year on average since 2000.
The good news amid the bad is that Berkeley's economy seems to be improving even if it's not enough to cover the city's costs.
The city saw an increase of 14.7 percent in real estate sales in the past six months, a 16.5 percent increase in the hotel tax and a 4 percent increase in the business license tax.
Parking fines have inexplicably declined by $42,153 in the past six months to $4.7 million, Kamlarz said.
That is probably a sign of a continued poor economy as the same thing is happening in other cities, Kamlarz said.
Doug Oakley covers Berkeley. Contact him at 510-843-1408. Follow him at Twitter.com/douglasoakley.