PITTSBURG -- Facing continuing declines in property and sales tax revenue, city leaders passed a budget this week that cuts spending by $840,000 while using $2 million in rainy-day savings.
The $30.9 million budget for 2011-12 included seven layoffs and cutting vacant positions, reducing the city's workforce from 261 to about 240.
It also relies on the $8 million budget-stabilization fund to stay in balance.
"The use of the $2 million from the rainy-day fund enabled us to minimize layoffs," City Manager Joe Sbranti said.
Employees chipped in with salary and benefit givebacks, according to Councilwoman Nancy Parent.
"Our employees have really stepped up and worked hard to maximize what we can do," she said. "They've made considerable financial sacrifices."
Pittsburg has tentative agreements with its police officers' association and its police department management team for savings on salaries and benefits in a new contract that will replace the one that expires June 30, Sbranti said.
The terms of the new agreements will be announced next month, he said. "There will be significant savings without reducing the number of officers on the street."
Pittsburg has about 80 police officers, including managers and officers on leave.
The city is continuing to consolidate executive positions. Pittsburg Power Co. Director Garrett Evans will also serve as assistant city manager, replacing Sbranti. Assistant city engineer Keith Halvorson has been promoted to city engineer; his old position will not be filled, Sbranti said.
Pittsburg negotiated new contracts with non-police unions a year ago that raised employee contributions to their pensions, capped the city's contribution to their medical insurance, and lowered the retirement benefit for new employees.
It also reduced the retiree health care benefit for current employees and eliminated it for new workers.
The changes have slowed -- but not eliminated -- increases in the cost of fringe benefits, which will rise to $17.5 million in the 2011-12 budget from about $16.2 million in 2009-10, according to the budget document approved Monday by the City Council.
The city is trying to reopen discussions with non-safety unions and nonrepresented employees to get further cost reductions, including furloughs.
The budget-stabilization fund was created after former City Manager Marc Grisham took charge in 2004. In addition, the city has a $6.8 million general fund reserve that it can use to eliminate deficits.
Contact Rick Radin at 925-779-7166.