Last spring, as the city of Fresno tried to close a nearly $27 million budget gap, city officials made concessions to convince some unions to postpone contractual raises.
Now those concessions are coming back to haunt City Hall.
In most cases, promised raises were deferred one year, and in one case the deferral was just six months to Jan. 1. And several unions, in exchange for delaying their raises, negotiated clauses that prohibit layoffs or furloughs in the 2009-10 fiscal year.
One union that didn't get a no-layoff clause, the Fresno City Employees Association -- which represents modestly paid clerks, dispatchers and other white-collar workers -- now fears it will bear a disproportionate share of job cuts as the city tries to chop another $28 million to cope with plummeting revenues.
"We expect to be hit with layoffs," said Dee Barnes, president of the Fresno City Employees Association. "Unfortunately, we're afraid we're going to be the hardest hit" of all city unions.
Some in Barnes' union lost their jobs this spring when Mayor Ashley Swearengin and the City Council took steps to close an anticipated $27 million deficit over the next two fiscal years.
City officials were counting on the cuts, the short-term deferral of promised employee raises and a reviving economy to pull the city through what was expected to be a sharp but temporary financial crisis.
It wasn't enough.
Swearengin on Oct. 22 told the council that the 2009-10 budget is in balance, but the 2010-11 budget is looking at a $27.8 million deficit in the city's general fund, much of which pays for police and fire protection.
Swearengin promised to return to the council on Nov. 19 with money-saving recommendations, but she and budget director Renena Smith gave few specifics other than "everything is on the table."
Last week's council agenda left no doubt where city officials are looking: In a closed-session conference, council members were to discuss with city labor negotiators the agreements with 11 unions representing city workers.
The item was postponed. Assistant city manager Bruce Rudd said city officials didn't have anything concrete to tell the council.
But it's clear that, unless some unions voluntarily agree to reopen their contracts, city officials have little choice but to deliver on the promised pay raises. Short of an economic miracle, City Hall will have to depend on substantial layoffs to close the deficit over the next 18 months.
Swearengin wants to implement the deficit-reducing plans by Jan. 1. That means dozens, perhaps hundreds, of city employees could be getting pink slips in the middle of the winter holiday season.
Swearengin on Monday said she is confident that the city's unions will cooperate.
"We'll make it through this time and we'll continue to deliver core services," Swearengin said.
But City Hall is facing a fundamental change, Swearengin said. The city spent freely over the past five or six years as revenues exploded in a super-heated economy, she said. Then the recession hit, revenues declined by about 20%, yet some major expenses -- such as employee salaries and benefits -- remained level or rising.
The city has little wiggle room, Swearengin said.
"We may be able to Band-Aid a bit with furloughs," she said. "But, ultimately, we have to contract so that we can sustain our operations over the next couple of budget years. That's because we know revenues are not going to come back" anytime soon.
Two of the city's biggest, most powerful unions appear unwilling to make any more concessions.
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