The downturn in the national economy and a local shortfall in development-related revenues left city officials scouring the books in detail again this year as they attempted to close a general fund budget gap of more than $5 million for fiscal year 2008-09.

As adopted unanimously at the June 11 meeting of the City Council, the general fund budget for fiscal year 2008-09 is $63.6 million, including a $152,800 surplus carried forward from last year.

The proposed expenditures total $66.7 million- an increase of 4.2 percent, or $2.7 million, over last year's estimated actual expenditures of $64 million.

"As you know, this has been a very difficult budget year," said City Manager Mike Sedell. "With the economy the way it is, we anticipate it continuing on. But it also presents us the opportunity, to some degree, to take a critical view of the organization and attempt to right-size it where possible." view of the organization and attempt to right-size it where possible."

As in past years, city staff developed a list of recommendations for the City Council to approve in order to help close the budget gap. This year, the list included a hard hiring freeze over all city departments as well as seven layoffs.

Sedell said that during a review of last year's budget in February, the City Council directed staff to make recommendations that would not affect services to the public.

"It will be more difficult to get those services," Sedell said. "Employees will really have to pitch in and work, but I know our employees are up to that task."

Assistant City Manager Laura Behjan said that on top of the preliminary $3.1-million deficit, an additional $2 million in expenditures was added because of preapproved police and managementlevel salary and benefit increases in the amount of $1.8 million, and seven requests- totaling $110,900- for new funding from various city departments.

Simi Valley police are unionized under the Police Officer's Association and have a contract with the city to negotiate salary and benefits each year, Behjan said.

City management, which includes city department heads and supervisory administrative staff, also has annual compensation reviews that take into account the cost of living and what other employees are receiving.

"It was an educated estimate based on where we believe these groups are going to go with their compensation packages this year," Behjan said. "When we made our estimate, we considered what the maximum cost would be to the city."

To balance the books, the City Council last Wednesday approved a list of reductions that included the elimination of funding for more than 30 vacant positions citywide.

Funding for four filled nonofficer positions in the Simi Valley Police Department and three building inspectors in the environmental services department were also to be eliminated.

But Kenny Buxbaum, one of the building inspectors targeted for layoff, asked the City Council to reconsider on the grounds that the layoffs would impede the city's ability to enforce building code compliance.

"Are the loss of these very few filled positions going to make a significant enough difference in the budget to justify the potential loss of effectiveness of our codecompliance program, the loss of these highly trained and specialized positions and the severe impact this will have on the families of these employees?" Buxbaum asked.

Later in the meeting, Mayor Paul Miller asked city staff to find a way to extend funding for the building inspectors up to six months, in hopes that an opportunity would soon arise to continue their employment.

"The question is, can you find another rabbit and pull it out of the hat?" Miller said.

Councilmember Glen Becerra added that the code-compliance program may be even more important now because foreclosures and residential transitions into rental properties are increasing.

"That program helps protect the quality of our neighborhoods," Becerra said.

"We need to find a way to right-size and be responsible but also keep the talent."

Sedell suggested making a few adjustments in other categories to accommodate the council's request. Increasing the city's interest rate for Community Development Agency loans very slightly and taking a little surplus money from the workers' compensation reserve fund would make available an additional $90,000 to fund the inspectors for six months, he said.

The council agreed and approved Sedell's recommendation.

"So the message here is that less on-duty accidents equals more money to deal with," Miller said. "So work safely, because that may help your fellow employees stay here longer."

Along with the general fund, the City Council approved a fiveyear Capital Improvement Program with a budget of $16.7 million for fiscal year 2008-09, as well as budgets for the Sanitation Fund and Simi Valley Transit.

The total city budget for 200809, including state, federal and special monies from outside the general fund, is $140.5 million.

Sedell said that staff expects a bigger general fund deficit for fiscal year 2009-10 and that another round of cuts may have to be made when the state budget is adopted this summer.