The initial budget proposes making up the difference by taking money from the reserves — a method that has drained more than $30 million from city coffers since the start of the recession.
City officials did not include potential savings from laying off hundreds of city workers and replacing them with contracted services to offload pension costs. Officials argue that expected increases in city worker pensions in the next few years will obstruct attempts to reinvest in city maintenance as the economy crawls back to life.
Employees are contributing to their own pensions and that could level off the costs, but it's not guaranteed, pension experts have said.
Still, $3.3 million is the smallest deficit the city has faced in years, but Righeimer and others pledged to run the city as a business on a zero-based budget.
The proposed budget shows a nearly three-fold increase in capital improvement spending, from $3.8 million to $10.4 million. A lot of that is attributable to dramatic increases in gas tax and Measure M revenues that are required to go to street repairs, city officials said. Capital improvement spending in 2008-09 was $11.1 million and $12.4 million in 2009-10.
For the second straight year, the city isn't planning to spend money on police recruitment. City officials are considering restructuring the department and laying off officers.
Park maintenance could increase about $600,000 and street cleaning almost $400,000, excluding capital improvement funds. Development services may see an injection of about $500,000, according to the preliminary budget summary.
The overall budget increased about 7%, from $109 million to $117 million.
The council will go over the preliminary budget at a study session Tuesday night at City Hall.