San Mateo debuts plan to attack $7M deficit

“Staffing is 70% of our general fund and in order to reduce costs while maintaining service levels the only real effective way you can do that is to really flatten out employee compensation costs,” City Manager Drew Corbett said at the meeting. “If you assume salary increases that you don’t provide you generate that savings without actually reducing compensation.”

Councilmembers were not enthusiastic about the move, but said it’s more favorable than layoffs.

“I don’t want to see services cut or have employees be cut so this is certainly the lesser of certain evils, no question about it,” said Councilwoman Diane Papan. “We’re each going to have to do our part.”

But the proposal is not yet a done deal as employee bargaining groups have yet to agree to it. If bargaining groups do not agree to the proposal, then officials will attempt to secure $3 million in savings by restructuring employee compensation in some other way, an official confirmed after the meeting.

Additionally, Corbett believes he can save the city $1 million through the “strategic elimination of [vacant] positions” as well as by relying on technology to streamline certain employee functions. Doing so would have “no real impact on services,” Corbett added.

Third, the city’s capital improvement fund will contribute $2 million annually over the next five years to cover discretionary projects previously funded by the general fund.

Finally, the city is relying on the passage of a hotel tax hike in November from 12% to 14% to cover the remainder of the deficit. The move is expected to bring in an additional $1 million.

Depending on the outcome of future conversations with employee bargaining groups, the city may also close non-essential facilities and furlough a percentage of employees between Christmas and New Year’s Day to generate $500,000 in general fund savings. Another proposal to close non-essential facilities every other Friday was endorsed by at least one councilmember, but is not yet moving forward.

While the strategy for the time being is to make cuts without affecting services, some councilmembers did question that approach.

“Not all our services are created equal and I definitely believe there are some things over the years that maybe have gotten up to being higher than they need to be right now and maybe if they disappear tomorrow no one would even notice,” said Deputy Mayor Eric Rodriguez. By way of examples, Rodriguez threw out trimming hedges twice a week rather than three times or street sweeping.

Corbett said “targeted service cuts” may be necessary as part of phase 2 of the city’s response to its financial challenges. The four actions above are part of phase 1.

In other business, the council wants to extend the city’s moratorium on commercial evictions for another month to the end of June. It also wants to see the required period for paying unpaid commercial rent to be extended for a period of potentially six months to a year. Those decisions will be made at a meeting next week.

A task force has also been created to explore a proposal to close certain streets to allow restaurants to reopen on them. The idea is outdoor service will be more easily done in a manner compliant with social distancing.   

During the meeting, Corbett also noted the city-owned Poplar Creek Golf Course has been a big hit since it reopened last week to San Mateo County residents only. Almost all, if not all, available tee times have been booked so far, Corbett said.

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