Hard Budget Decisions

The City Council makes hard decisions, but laying off employees is the hardest. At its regular meeting Tuesday night, May 3, the Council may decide to reopen city employee contract agreements to avoid potential layoffs as we address the $1.7 million deficit for the 2011-12 budget.

Action is necessary to achieve a budget with balanced expenditures and revenue projections for fiscal year 2011-12. Our employees stepped up in 2010 when agreeing to salary and benefits reductions requested by the Council. Revenues on which the city depends are lower because of depressed property values, lower Benicia Industrial Park sales taxes and lower franchise fees, so we continue to make expenditure adjustments. The choice between layoffs and salary and benefits reductions is not a welcome one, but the situation speaks for itself.

These decisions are grounded in the Council’s policy to maintain a balanced budget, to avoid service cuts and to maintain fair and competitive salaries. To quote our 26th president, Theodore Roosevelt, “Do what you can, with what you have, where you are.” Our city employees have been inventive, creative and frugal in finding ways to reduce costs and maintain our parks as the jewels of Benicia; our police deparment’s vigilant effectiveness; our fire department’s dependable and responsible emergency response; our water quality for drinking; our wastewater treatment to avoid polluting the Carquinez Strait; and other everyday public safety and administrative needs.

Their efforts are commendable. But it is not enough in the face of such a severe revenue shortfall. That is why we have the decision Tuesday night about further layoffs and potential salary and benefits reductions.


After this decision is made, the Council will continue its regularly scheduled study sessions to decide what it will take to have a sustainable budget. The genesis for considering a sustainable budget is common sense.

From a business perspective, sustainable development is accomplished by understanding comprehensive system dynamics, building resilient and adaptive systems, anticipating and managing changing economies and other variables and risks, and earning a profit. This is good for business, good for the city and good for our environment.

Sustainable development reflects not a trade-off between business and the environment, but the synergy between them. For these common sense and practical reasons, community development and sustainability are at the heart of the goals developed in the 1999 Benicia General Plan.

The Council will need to develop guiding principles for a sustainable budget. Here are some to consider.

[Suggestions and ideas are welcome; please click on the "comments" link at the bottom of this post and share them.]

Sustainable Budget Guiding Principles

• Maintain a budget that buffers the city from state and county fluctuations.

• Sustain a minimum 20 percent reserve. (We currently have city policy to keep a 20 percent reserve and the Council has directed staff to develop more defined criteria for use of the reserves.)

• Cultivate a diversified economy, workforce and tax base to avoid dependency on one industry or firm.

• Pursue partnerships and potential consolidation with other jurisdictions.

• Seek increased cost efficiency in service delivery while maintaining high-quality city services.

• Ensure that fee structures are legally sound and related to policy goals.

• Develop a long-term financial plan and a budget process to fund city needs and services.

In addition to these principles, we need to:

1. Consider methods to reduce and/or eliminate unfunded liabilities.

2. Define unmet needs and identify funding mechanisms for them.

3. Work with other agencies/jurisdictions to consolidate common services where it is mutually beneficial and where resources can be maximized.

4. Review city organization structure; consider the matrix team system for projects and ongoing operations.

5. Ensure labor contracts are fair and support delivery of services.

6. Use performance management and metrics (where applicable) for analysis framework for budgeting.

7. Continue monthly budgeting review until one-year budget stability is achieved; then use quarterly reviews.

The Council, staff and the public are working together to maintain our quality of services and programs and the overall quality of life within our budget, with a sustainable future in mind. On behalf of the Council, I thank the public attending our meetings for the constructive ideas, suggestions and appreciation for our task at hand.