Coronavirus: Santa Monica City Council Approves Employee Buyouts
SANTA MONICA, CA —The City of Santa Monica is facing a budget crisis in the wake of the coronavirus outbreak and asking employees to leave their jobs. The city council voted unanimously during a special meeting on Tuesday to move forward with a "Voluntary Early Separation Incentive Program" and will create a plan for a major organizational restructure. By reducing staff and restructuring, the City hopes to mitigate some of the costs lost during the COVID-19 pandemic closures across city facilities and programs.
Santa Monica, like many cities and communities across the U.S., has been struck financially as people are required to stay home and avoid contact to help stop the spread of the coronavirus. The City announced in its report that it expects a $154 million deficit through June 2021—and that's anticipated if businesses do reopen this June.
"Because the City relies heavily on revenues impacted by the quarantines including shopping, tourism, dining and entertainment, our City is facing massive deficits to our budget as a result of the pandemic," according to the report. "The Voluntary Employment Separation Incentive Program is intended to mitigate some of these impacts while also avoiding some reductions in our workforce. Direction from Council to develop a plan for restructuring City operations and balancing the City budget to address impacts from the COVID-19 emergency is critically important to the City's long-term fiscal sustainability."
To address the budget and unexpected revenue loss due to COVID-19 closures, the City is making a significant move to offer buyouts to employees.
"Staff projects that between the period through June 30 (the end of the fiscal year), the city will have a $72 million budget gap in its General Fund in large part due to the sudden loss of revenues," the report said. "We expect to use all of our Economic Uncertainty Reserves and some of the city's rainy day fund to fill this General Fund gap."
The City expects to restructure in response to the public health emergency.
"This is an unprecedented situation, forcing massive changes in how we operate and drastically reducing revenues to an extent never seen before," said City Manager Rick Cole. "The altered situation and the gaping hole it has made in our budget requires us to make heartbreaking decisions. In the end, the crisis will force reductions in important and valuable services to the community and affect the lives of our incredibly dedicated workforce."
"We will strive to make intelligent and compassionate recommendations to support our community, beginning the long road towards economic and social recovery. Ideally, we'd have time for a thoughtful, collaborative process – but as we've seen, events are moving with breathtaking speed. The longer we wait to make hard decisions, the greater the long-term threat posed to essential services and the staff who provide them," Cole said.
Staff who voluntarily separate will receive a lump sum of $15,000 or $10,000 (depending on their date of hire) and 18 months of medical benefits. Employees who choose the separation agreement will have their last day on May 9.
A proposed restructuring plan will be presented to the city council on May 5 during the next meeting.
It's unclear how many employees might lose their jobs. Patch reached out to the City of Santa Monica for more information.
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This article originally appeared on the Santa Monica Patch
