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Thursday, Aug 18, 2022
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Sharp Revenue Drop Forces City of Palmdale Staff Cuts

The City of Palmdale has announced a reduction in force of 11 permanent employees. Cuts have also been made to six positions in planning, engineering and building and safety that were already vacant, City Manager Steve Williams stated. “This was an extremely tough decision that the City worked diligently to avoid, first by enacting a hiring freeze three months ago and then by stopping or delaying several capital projects for the last half of this fiscal year,” Williams stated. The Planning Department lost a senior code enforcement officer, a planning aide and a code enforcement officer position. Building and Safety lost three building inspector aides and a permit technician. Public Works lost an inspector, secretary, senior civil engineer and an assistant city engineer. Williams blamed the cuts on declining revenues, with an expected drop of 48 percent in engineering alone for this fiscal year. The city hopes to save $2.3 million per year as a result of the downsizing. Slumps in housing and financial markets may result in a drop in development revenues to $4.1 million for the 2008-09 fiscal year. Compare this to the 2006-07 fiscal year in which revenues were $11.9 million. For the 2007-08 fiscal year, revenues are expected to be $7 million, according to Williams. Employees who have been laid off will receive severance packages as well as health care premium payments for a period of time and outplacement services through a professional firm, according to Human Resources Director Bill McLeod. City officials say they do not know whether more staff cuts will be made, but the outlook is bleak. The City does not know yet how it will be affected further by the State of California’s projected $16 billion budget crunch. “Our fiscal year 07-08 development-related revenue estimates are already down $400,000 more than expected and our 08-09 development revenues are projected to decrease $2.9 million as compared to 07-08,” Williams stated. “There are several other economic factors coming up that will impact the City, including a current and projected decline in sales tax revenue and the cessation of ‘will serve’ letters by L.A. County Waterworks for new development.” Additionally, the City of Palmdale faces the “borrowing” of gas tax revenue by the State of California for five months totaling $1.1 million, a potential decrease in property tax revenue due to expected valuation appeals next fiscal year and an increase in its Sheriff’s contract cost of $1.2 million for next fiscal year due to the rise in cost-of-living and growth expenses, Williams elaborated. “Add to that the fact that the Consumer Confidence Index [recently] dropped to its lowest level since 1992, housing starts on a national level remained near a 16-year low as of January 2008 and the manufacturing and non-manufacturing indexes are showing contractions in new orders, employment, inventories and backlog of orders,” Williams stated.

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