Seeking to close a $3 million budget gap, Palo Alto officials are proposing to pare down the bureaucracy in city's Public Works Department, reducing the department's structure from six divisions to three.
The reorganization, which City Manager James Keene is including in his proposed budget for fiscal year 2012, would save the city about $300,000 in the fiscal year, which begins July 1. Under the new structure, the three divisions that would comprise the department would be Environmental Services, Public Services and Engineering Services.
Keene wrote in his proposed budget that Public Works officials undertook a review of the department's organizational structure because of "numerous vacancies in key positions" and the pending closure of the city's landfill in Byxbee Park. The reduction in the Public Works budget amounts to the largest expense reduction in the budget proposal, which Keene will present to the City Council tonight (Monday).
Under the new setup, engineering staff from existing divisions such as Facilities and Operations would combine with the Public Works Engineering division to form a new Engineering Services Division, which would coordinate the city's capital-improvement program. The new Public Services Division would manage city facilities, trees, streets and storm drains, as well as the city's vehicles. The Environmental Services Division would oversee the Regional Water Quality Control Plant and its waste services.
"By reducing six divisions to three divisions and combining workgroups, the department will gain efficiencies in streamlined workflow, program/project coordination and oversight," Keene wrote in the budget.
The city's proposed $146 million budget trims departmental expenditures by $1 million and aims to achieve the bulk of remaining savings through concessions from city workers, particularly those in public-safety unions. Keene noted that personnel costs total 64 percent of the General Fund budget, with 56 percent of these costs in the police and fire departments.
Workers from other labor groups, including the Service Employees International Union and the non-unionized group of managers and professionals, have already agreed to a variety of concessions, including a two-tired pension system (with less generous terms for newly hired workers), contributions to medical costs and elimination of bonus payments for the management group. Keene stressed in his budget document the importance of all bargaining groups sharing in "concessions and contributions to the City's immediate and long term fiscal demand."
"The budget includes a number of departmental reductions such as restructuring the Public Works Department for cost savings, but the budget I present to you is balanced by counting on achieving significant timely concessions from our public-safety unions, which have yet to make any structural cost savings contributions to the City's fiscal difficulties," Keene wrote. "If we are unsuccessful in this regard, by mid-year we will need to return to Council with staff and departmental reductions in the Police and Fire Departments."
Palo Alto remains at an impasse with its firefighters union and is preparing for binding-arbitration proceedings. The police union's contract with the city expires at the end of June. The City Council is scheduled to discuss the status of negotiations with the two unions in a closed-door session before tonight's council meeting.
Keene's proposed budget also includes $1 million in new funding for the Office of Emergency Services and $600,000 for improvements at the Development Center.