- The Fresno Bee
Monday, Mar. 12, 2012 | 11:56 PM
Fresno Mayor Ashley Swearengin on Monday warned that the city is in "severe financial stress" that demands immediate action and presented a 10-year plan calling for more concessions from city workers.
But the presidents of the city's two public-safety unions said they sense Swearengin is being overly dramatic for political reasons, and urged the public to get all the facts before choosing sides.
Fresno's budget season has come early this year, and it's already turning into a war.
At a morning City Hall news conference where she was joined by City Manager Mark Scott, Swearengin warned that "there is no Plan B" to the cost reductions, and Scott warned that even bankruptcy could not be ruled out if expenses don't come down.
"It is not in our employees' best interest for their employer to be so financially unstable," Swearengin said. "I hope they will see that."
The plan, which lays out the city's financial health, projects a skyrocketing long-term deficit if cost-cutting measures are not taken. The deficit would be $15.1 million in 2013 and rise to $65.8 million by 2017. The causes for the red ink include the national economic downturn, unsuccessful city investments and "unaffordable future commitments to labor groups and others."
Those less-than-stellar investments include Granite Park, the former Fresno Metropolitan Museum and an overly ambitious downtown baseball stadium. Each of them saddled the city with long-term debt.
Swearengin said the city must choose between laying off more employees and cutting more city services or adopting the 10-year plan to regain financial stability. She said more layoffs and service reductions aren't a wise option.
In an afternoon meeting with The Bee's editorial board, Swearengin and Scott moved the talk far away from the fiscal-emergency declarations and Chapter 9 bankruptcy threats that have made the city of Stockton a national example of financial incompetence.
At the same time, Swearengin and Scott drew a line in the sand for the city's 3,200 employees, implying that the Stockton scenario isn't far-fetched for Fresno for these reasons:
Three years of incessant layoffs, service reductions and penny-pinching haven't done the trick.
The city will struggle to close a $2.1 million general fund budget gap in the fiscal year ending June 30, let alone the huge gap projected over the next five years.
The revenue picture is flat -- sales-tax proceeds up a bit more than expected, property-tax proceeds down a bit more -- and Fresno is stuck in a farm-based economy traditionally slow to come out of recessions.
About four out of every five general-fund dollars go toward employee compensation -- salary, side benefits, health care, pension.
The city's budget is broken, one-year Band-Aids are no fix, core services have hit rock-bottom and the only solution is a fundamental restructuring of how Fresno compensates its municipal employees.
"The employees we have will have to cost us less," Swearengin said.
Almost all of those employees belong to unions, many with contracts. That means Swearengin and Scott will return to a plan they tried a year ago with modest success during a similar budget crisis -- closed-door talks seeking voluntary union concessions.
Swearengin's new policy is long, but there is a simplicity to it.
She wants more city control over pension and health care systems that, she said, currently have too much employee influence.
She wants new union contracts that aren't so generous with goodies such as accumulated leave balances.
She points to bone-dry reserves and says it's time to set money aside for long-deferred maintenance and the replacement of aging assets.
She wants employee wages that make sense for a city in the San Joaquin Valley -- in part because that's fair to taxpayers, in part because that's the only way to regain the confidence of credit-rating agencies.
Swearengin and Scott plan to hold a workshop on the policy at the March 22 City Council meeting, then return a week later and ask the council to adopt the document as City Hall's official stance.
It's unclear when hearings on next year's budget will begin, but in recent years they've kicked off in May.
Pointing to a copy of the plan -- the "Fiscal Sustainability Policy" -- at Monday's editorial board meeting, Scott said, "There's no reason this won't work -- unless we don't get the cooperation we need."
That's always the big question with city budgets: Who yields? Who wins?
Jacky Parks, president of the police officers union, and Kirk Wanless, president of the firefighters union, held a joint news conference late Monday afternoon to say their members will listen to the administration but make no promises.
Almost all general-fund money spent on compensation goes to public-safety employees. Parks and Wanless held the news conference because they know their unions are the administration's main target.
"We need to have a conversation with Mark Scott," Parks said. "We want to see what's in that budget. What are the old projects? What are the new projects?"
Parks said that last comment was a reference to the police auditor, a position defunded this year. The police union views the police auditor as unnecessary in tough budget times.
Echoing a sentiment made by Parks, Wanless said he was surprised that Swearengin and Scott publicly unveiled their plan before giving him a hint of its content.
"If we make another deal, do we get asked again next year?" Wanless said. "When does it stop?"
Wanless said he wonders if a budget crisis is "spin" being used by Swearengin and Scott for political reasons.
Parks and Wanless both noted that their unions have made concessions in the past three years. They said they need detailed proposals before they can ask their members to consider concessions to their binding contracts.
City of Fresno's report on financial sustainability
