The city of San Jose on Tuesday announced major furloughs for unbenefited and temporary part-time employees, citing at least $45 million in general fund "revenue shortfalls" by the end of the year.
"After a lot of thought and careful consideration, we've come to the decision that we're going to end administrative leave for part-time, unbenefited and temporary employees," Dave Sykes, the city manager, told the San Jose City Council via teleconference Tuesday evening. "This is, in essence, a furlough for the unbenefited and temporary employees, and that furlough will begin on May 4th. And certainly there's always the opportunity to assign those, or reassign those employees, should we need their support in terms of how our response continues."
These employees were planned to have paid administrative leave until the May 3rd expiration of Santa Clara County's current shelter-in-place order.
The furloughs will be of workers in departments such as Parks, Recreation and Neighborhood Services, the San Jose Public Library and the San Jose Police Department.
This will not be the only thing the city does as it tries to recover from the coronavirus outbreak.
"This is really step one, if you will, to address significant revenue loss in the current year," Sykes added. "There will be future steps that we will need to take in the proposed budget for next year, and that will be coming very soon. I think the approach that we're taking is not an overreaction. We need to take these revenue shortfalls seriously. They are real and we certainly can not assume that we will be reimbursed for lost revenue, as we discussed earlier in the day."
Jim Shannon, the city's budget director, also briefed the council Tuesday to detail additional steps forward through what will be the next American recession.
Shannon detailed additional cuts to the city's and city employee's expenditures not directly related to COVID-19, including the suspension of capital projects that have not started.
The budget director also said the city's greatest estimated revenue loss will be about $27 million from sales tax - or about 20-percent of the city's budget, Shannon said.
"I just know that this is not a problem we're going to be able to deal with in a year," Mayor Sam Liccardo said, adding that he believes the next year's projections "are going to get a whole lot worse."