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City Manager Lays Out Plan to Fill "Gaping Holes" in Budget

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By Jorge Casuso

April 29, 2020 -- During an online meeting with municipal employees Wednesday, Santa Monica City Manager Lane Dilg outlined a plan to fill "gaping holes" in the budget that includes department mergers and widespread layoffs by May 30.

The plan to address the sudden and devastating financial impacts of the coronavirus shutdown lays off workers by order of seniority, while allowing longtime employees to "bump down" to jobs at a lower classification, both standard practices under union contracts.

Under the plan, which is being finalized, layoffs will be made at the department level and determined by seniority within the department, Dilg said. All assistant director positions will be eliminated.

The proposed plan eliminates the Housing and Economic Development Department and Community & Cultural Services, Dilg said.

Economic development would become part of the Planning Department, as would the housing section responsible for affordable housing production and other programs related to development.

The section that administers Section 8 vouchers and other housing programs would become part of a new Community Services Department, Dilg said.

"This reorganization will force us to reduce City staff," Dilg told the approximately 300 City employees who viewed the meeting online.

"Over the past week and a half, we have reached out to labor representatives," Dilg said. "We have been adjusting plans and proposals along the way."

To date, Dilg said, "the proposal is still in progress."

Dilg laid out an urgent timeline that would lead to layoffs before the June payroll kicks in.

Employees have until Friday to enroll in the Voluntary Early Separation Incentive Program (VESIP) that offers lump sum payments to full-time municipal workers who voluntarily leave their jobs.

On Tuesday, City staff will present the City Council with a plan detailing the layoffs by job title, Dilg said. The Council is scheduled to adopt the plan after making changes.

Two days later, on Thursday, the City will issue layoff notices "and the bumping process will begin," Dilg said, referring to the voluntary demotions.

The last day of employment for laid-off workers will be May 30, Dilg said.

The sudden loss of revenues -- which the City has been tracking with the help of consultants and local businesses -- is expected to result in a $72 million general fund budget gap by June 30.

The gap is expected to widen by another $154 million over the upcoming fiscal year beginning July 1, Dilg said.

"This is an event like nothing we've seen before," Dilg told the employees. "It means we need to change the way we operate.

"No matter how you cut it, there are gaping holes," she said.

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