Despite earlier rumors, the city of Atwater continues to sidestep bankruptcy. City leaders took action Monday that could save $3 million over the remainder of the fiscal year.
The city announced eight layoffs to city staff, and reduced one position to part-time. As recently as a few weeks ago, the city had been considering layoffs for as many as 38 employees.
"I never imagined when I took on this position that I would be laying off eight hardworking people," said Frank Pietro, interim city manager and police chief. "I want to say to those that will be laid off, I'm truly, truly sorry."
The City Council unanimously voted to move forward with a special election on a half-cent sales tax increase, which would require two-thirds voter approval. The council will still need to pass an ordinance to put a ballot initiative before residents.
According to city staff, the tax increase would bring in about $1 million annually, and sunset in 10 years.
At the same time, across-the-board fee increases were passed by the City Council.
The city has been staring down a roughly $3 million general fund deficit, and a $1.5 million negative balance in its combined water funds.
Employees take pay cuts
Over recent weeks, the city has taken several steps to address the severe budgetary situation.
A recently declared "common-law" fiscal emergency allowed the city to open up contract negotiations with its public employee unions.
The police officers union accepted a 22 percent pay cut, which officials say will prevent significant layoffs in public safety and save about half a million dollars.
Other city employees have agreed to take 13 percent to 15 percent pay cuts.
At the same time, the City Council this month put in motion a 150 percent water rate increase for average users. If the plan goes through, it would be the water funds' first fee increases since 1992.
Increases would be incremental over the next five years. The first hike would increase rates 40 percent and could go into effect as early as Feb. 1.
Property owners will receive notices of the proposed rate increase over coming months. If more than 50 percent protest the hike, the rate hike would be rejected. If the increase is adopted, Atwater would have average water rates compared with other Valley towns, according to city officials.
The city continues to avoid declaring an Assembly Bill 506 fiscal emergency, a step toward filing for bankruptcy. The issue will next come before the council at its Nov. 12 meeting.
Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or jsmith@mercedsunstar.com.
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