City Council Approves Budget

The approved its fiscal year 2011-2012 budget during Thursday night's meeting with only hours to spare before the midnight deadline.

The city faced a $3.8 million budget shortfall, which was eliminated through a continued 6 percent pay reduction for city staff and a $1 million loan from a reserve fund created to deal with rising pension costs, according to City Manager Bill Workman.

Additionally, some employee unions were asked to defer the 4 percent cost-of-living increase agreed to in 2009.

"We have tentative agreements with our employee associations," Workman announced at Thursday's meeting, calling the agreements "mutually beneficial." After the meeting, he told reporters that negotiations with the unions lasted into late afternoon Thursday.

Terms of the agreements won't be finalized until mid-July, he said.

The $3.8 million deficit is due to declining tax revenue and new state mandates, as well as what city officials have characterized as "money grabs" from the state. Additionally, Workman estimated the city's contribution to the California Public Employee Retirement System (CalPERS) will increase $3.7 million over the next four years.