Worst case: 80 city staffers could face layoffs

The city of Folsom has painted a bleak picture for the staff in a series of recent meetings. An $8.4 million budget deficit could result in the loss of up to 80 positions and the depletion of Folsom's reserves in a worst-case scenario, according to Folsom City Manager Kerry Miller. Miller has held what he refers to as "chats" with employees over the last two days letting them know the city is tossing out their current budget and will start from scratch. "It doesn't make sense to operate on a budget that no longer reflects fiscal reality," Miller said. "This will be a new budget with a multi-year approach, running through June 30, 2010." Miller said the move was necessary because of the poor economy and a drop in sales tax revenue. He said there has been a decline in general fund revenue, which is used to pay for most employee salaries ranging from public safety to parks and recreation. Original projections put the city at a $2 million loss, but new projections completed by city Finance Director Jim Francis put the city even deeper in the hole than originally estimated. "The state (budget) uncertainty and the sales tax uncertainty (concern us)," Francis said. "It's going to take a combination of things to resolve this." Miller said there are no "sacred cows" and that all options were on the table, including dipping into the reserves to help balance the budget and reducing staff. Miller said the city had already taken steps to prepare for a poor economy. They implemented a hiring freeze, restructured several positions and restricted discretionary spending. "We've already gone through one phase of contractions of our budget," he said. New projections put sales tax revenue 12 to 13 percent below earlier forecasts. Miller said the city is looking to address the issues now rather than wait. The new budget will be based on a zero-base approach, with each department justifying all programs and expenditures. "We're going to make all departments justify programs from dollar one," he said. He said city staff will be working on the new budget between now and the end of the year. He expects it will be presented to the city council in January and adopted at the end of that month. John Spittler, Human Resources director for Folsom, said senior city officials are meeting with all staff members and employee bargaining units. "We've either met or are going to meet with all the groups," Spittler said. It is too early to say which departments might be affected if the city is forced to reduce staff, he said. Miller said the budget cuts should not impact essential city services. "Our goals are to cut costs while preserving the integrity of the quality of programs offered by the city," he said. Miller said he hopes to minimize the impact on city staffing levels. Don Chaddock may be reached at donc@goldcountrymedia.com.