Novato approves cutting positions
The Novato City Council has approved its first staff layoffs since the Great Recession in the face of a multimillion-dollar deficit and an economy shaken by the coronavirus pandemic.
The council voted unanimously on Tuesday to eliminate 17 positions.
“It takes people to deliver services, and we don’t sell a product,” CityManager Adam McGill told the council during itsmeeting Tuesday. “So really if we’re going to reduce the budget, it has to come from staffing.”
The city’s staffing levels will be reduced from 205.5 fulltime equivalents to 188.5 as a result of the changes, or about an 8% reduction.
Most of the staff cuts will eliminate already vacant positions across various departments, including administrative and management positions, a police dispatcher, a code enforcement officer, assistant city clerk and a building inspector, among others.
However, seven employees in the Parks, Recreation and Community Services Department will be cut.
The city is legally required to provide employees 30 days’ notice, but some are being given 60 days and others through Dec. 18, according to McGill. The laid- off employees will be offered transfers to other vacant positions in the city as required by labor agreements, assuming they meet the minimum requirements for those jobs, McGill said.
The cut of 10.5 vacant positions on Tuesday follows a prior elimination of three vacant positions in June.
Mayor Pro Tem Pat Eklund reiterated views brought up in past budget discussions that the city’s staffing levels were unsustainable given the city’s limited revenue streams.
“I am so sorry about the people’s lives that we’re affecting,” Eklund said. “I have voted ‘ no’ on our budget for at least the past five years, if not longer than that. I have been trying to get the attention that we are spending more than what we should be.”
The city’s peak employment of 234 full-time equivalents in 2003dropped to 182.27 by 2011 amid the Great Recession, according to city records. It would be another six years before staffing levels reached recovered to the most recent peak of about 208.7 full-time equivalents in 2018.
City residents and staffmust adjust their expectations on city services given these cuts and the economic challenges ahead, McGill said. There will be an impact on staff morale andwhat’s expected of the employees, McGill said, and residents will notice changes such as higher weeds in some areas and calls for service taking longer than normal.
“We tried to have as light a footprint as possible in re
gards to the folks out doing the work, mowing our parks, responding to 911 calls, caring for our medians,” McGill said. “But you can't have reductions in staffing without reductions in service.”
Mayor Denise Athas urged the staff to make clear to city residents what changes they should expect.
“I think if one thing that COVID has taught is that people do have a tremendous ability for tolerance as long as they understand what's going on and are communicated with,” Athas said.
The staffing cuts were made to address a projected $5.7 million deficit the city was projecting when it adopted its budget in June.
The deficit is the result of several factors, according to city Finance Director Amy Cunningham, including the pandemic's impact on city revenue streams such as sales tax, hotel use tax and city service fees.
However, the city was already facing a revenue shortfall, including the depletion of its Measure F sales tax revenues, in the face of rising employee costs, pension benefits, insurance costs and utility rates, Cunningham said.
“The city's budget is not structurally balanced and we've been using one-time monies to support ongoing services for some time,” Cunningham said. “This approach is not sustainable.”
The council approved several budget cuts in June, including laying off 100 seasonal and part-time parks and recreation employees; suspending all non- essential promotions; and eliminating all travel and training. Ten employees chose to participate in an employee buyout programthe council approved earlier this year. The council adopted a 5% cut in its compensation on Tuesday, which follows a 10% compensation cut for McGill adopted in June.
As a result of previously adopted budget cuts and the new layoffs, the city's deficit for 2020-2021 is expected to shrink by more than half, to $2.5 million, of which $ 400,000 is a one-time cost from the employee buyouts.
The City Council authorized staff on Tuesday to cover the $2.5 million deficit using its $10.4 million rainy day fund. The actual amount in the rainy day fundwon't be known until the city completes an overdue audit for the 2018-2019 fiscal year.
Using the rainy day fund for ongoing expenses such as staff costs is normally not recommended, Cunningham said, but the unique circumstances posed by the coronavirus pandemic make it appropriate.
Meanwhile, the city will continue evaluating its budget and exploring ways to bolster its revenues. City voters are set to decide on Measure Q, which would increase the city's hotel use tax from 10% to 12% to raise an estimated $ 400,000 annually. The council is exploring other options such as adopting a solid waste franchise fee, selling four- city owned properties, dipping into its Hamilton Trust fund and potentially raising the city's quarter- cent sales tax.
“Nothing's off the table,” McGill told the council.