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Fresh state budget hit possible

Submitted by on 1, May 20, 2009 – 5:50 amOne Comment

about_arnold_img3The resounding failure of state leaders’ ballot budget-fixing efforts could have a direct impact on the city of Alameda’s budget for next year, to the tune of $2.4 million.

In one of her running “chalk talks” on the city’s finances, Interim City Manager Ann Marie Gallant offered a list of potential fixes for the potential budget hit but stopped short of saying the city would need to make additional layoffs.

In the runup to Tuesday’s election, Governor Arnold Schwarzenegger said he may draw on city coffers to help balance the state budget if ballot measures intended to help fix an estimated $21 billion deficit failed. The $1.2 billion on borrowing would include a $2.4 million hit to the city of Alameda this year.

Gallant listed a handful of options for covering the loss of the funds – options that would include a slower repayment schedule for overdue workers compensation costs, use of some of the city’s limited cash supply, use of the city’s equipment replacement funds or immediate repayment of $1.5 million that Alameda Municipal Power owes the city (which could be tough for the utility because it is apparently set to dip into its reserves to balance its own budget next year).

She said that she hadn’t factored the state’s potential cash grab into her 24-month budget plan. But Gallant said she hopes this will be a one-time deal and that additional layoffs can be avoided. Under the plan, the city would get its money back in 36 months.

Gallant said she hopes the council will adopt a budget for next year by June 23, though she said its members may not know yet how much money the city will be getting from the state.

“We’ll see the results tomorrow. We’ll see what the governor says in the future,” Gallant said.

One Comment »

  • ted says:

    Or, how about a 5% across the board pay cut for all city employees? With a $60 million payroll, that's $3 million in the bank. If they're serious about avoiding layoffs and saving vital city services, there's no reason city employees can't give back a small slice of their (mostly) exorbitant salaries.

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