Community Corner

Executive Cuts Latest in City's Attempt to Trim Budget

City Manager Martín Bernal takes voluntary pay cuts to reduce city deficit for 2012 fiscal year.

With an estimated $2-$3 million budget deficit, the city of Santa Cruz is looking in many directions to bridge the gap.

City Manager Martín Bernal announced last week that he and 11 top city executives would take compensation cuts of more than $230,000 annually.

The cuts come on top of recent cost-saving moves by Santa Cruz, according to Finance Director Jack Dilles. The city has consolidated departments—such as the city manager and the city clerk—and cut Friday workdays. Now it's trying to refinance debt obligations and encourage other departments, like the police, to trim their budgets.

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"Santa Cruz is still deeply affected by the weakened economy," said Bernal in a statement. “Despite significant reductions made prior years, in order to preserve resident services, the city must make long-term, structural reductions and create savings that carry into future.”

Bernal said that he will forfeit cost-of-living increases, along with Assistant City Manager Tina Shull and the city’s 10 department heads. Bernal, with a 2010 salary of $186,279, also said he would not take a scheduled 5 percent merit raise.

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Executives will also lose big perks. They will pay an extra $100 a month in health care costs and trim the number of vacation hours they can cash out on from 60 to 20 every year. Their car allowances will dip from $480 to $240. These cuts add up to 10 percent of total compensation.

Bernal has already taken a 10 percent cut each of the past two fiscal years, according to Dilles, who said the executive cuts demonstrated "good leadership."

In the past year, the city has worked with the fire department, and other departments, to close the budget deficit. In doing so, the city slimmed the debt down from $7 million in the past year. However, it is still trying to trim it down to $1 million, or “a livable amount,” said Dilles.

The city is seeking concessions from the Police Officers Association. Its contact ended recently, and it is awaiting results of a vote that would decide whether $1.4 million, or 10 percent of its budget, will be trimmed from the next contract.

Mike Connor, head of the Police Officers Association, could not comment on the executive cuts, as "there are too many unknowns" to know the impact that the move will have.

But he worried that the 10 percent cuts will make it harder to retain talented police offers who cannot afford Santa Cruz's high cost of living and have higher paid employment opportunities elsewhere.

On May 24, a document with the budget cuts will be distributed to the public, according to Dilles. On June 7-8, the city will hold public hearings—which are to be announced on its website—to discuss it. Then, on July 12, the city will officially adopt a budget for the new fiscal year.

Overall, said Connor, "It's a huge budgetary issue. There's no quick fix."


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