Widespread Layoffs Possible in Coming Year


In the first of two sessions held by the Glendale City Council this month to analyze the budget forecast for the next five years and how to cope with shortfalls in tax revenue, the city was immediately faced with the dire position of having to take extreme measures to shore up the coming fiscal year’s budget gap. That gap, which is projected to reach over $15.4 million next fiscal year, is forcing the city’s hand to consider mass layoffs of city employees in order to shore up the deficit.

The layoffs, if approved, would affect approximately 210 municipal employees –11% of the municipal workforce.

Among other options that Bob Elliot, the city’s director of Finance, gave to the Council were outsourcing certain municipal jobs or collaborating with neighboring cities on certain departments.

“Really, our solution is going to be a combination of all these items,” he said. “It all depends on how far we can get with the retirement incentives.”

Incentives for city employees to retire early have been a preferred tactic by the City Council over implementing layoffs.

Whichever option or combination of options the city decides upon will likely cause an outcry. But City Manager Scott Ochoa reminded the Council that it has few options at this critical time.

“This is a big nut to crack,” admitted Ochoa. “We can kick the can or we can try to bite off as much as we can.”

Another measure to ensure that departments save money is to implement incentives for departments that keep their spending under control.

“This would allow departments to share a piece of whatever their unspent savings are if they’ve hit their strategic goals and their key performance indicators,” said the city manager. “That allows them to accumulate savings as a department and spend [their surplus] on those things that wouldn’t be able to get funded in the normal budget process.”

“I’m certainly a fan of that approach,” said Councilman Rafi Manoukian noting his approval. “It does make sense to give incentives to departments that are cost conscious.”

Other avenues the city is exploring is to raise taxes and fees for various services throughout the city including imposing a business license tax, which would see the city following similar actions taken by neighboring Burbank and Pasadena. According to a report by the city, the added revenue projected from this action alone could result in over $4 million for the General Fund.

Taxes being mulled by the Council, which would need a simple majority in an election in order to be effected, would include hiking taxes on use of electricity, water, gas and telephone services by 1%. At the moment the taxes for these services hover between 6.5% to 7%.

The city will resume examination of budget forecasts for the next five years on May 14.