More than 100 people filled Council Chambers at City Hall yesterday as City Manager Eric Anderson laid out his plan for balancing the city’s budget through 2008 by cutting 41 jobs, eliminating a projected $12.25 million deficit through 2007, creating a surplus of funds to launch a pilot program for neighborhood improvements, and avoiding property tax increases.

The plan also calls for aggressive reorganization of city government, such as eliminating the General Services Department, renaming the Economic Development Department, shifting duties from Human Resources to the Legal Department, creating an Information Technology Department, and establishing compensation policies, performance standards, and a performance-based pay structure for city staff.

“This proposal is a step toward organizing the city’s government from the point of view of citizens,” said Anderson during a noon study session televised live on TV Tacoma. “We are aiming to improve the way we deliver services to citizens – to simplify our processes, eliminate duplication and provide better customer service.”

The 41 layoffs include the elimination of 18.5 positions currently vacant, and 22.5 positions currently filled. The biggest hits would be felt in the Finance, Public Works, General Services, and Human Resources departments, which collectively would lose 17 positions currently filled. The cuts would be targeted at department director and assistant director positions. The city would provide a severance package to terminated employees, including 16 weeks of pay and benefits, access to an employee assistance program, and outplacement services.

Currently, the city employs 1,350 people.

Under Anderson’s plan, eliminating the General Services Department — which includes general administration functions such as the city clerk, community relations, fleet services, parking facilities, management of the Tacoma Narrows Airport, radio communications and TV Tacoma, and real estate services — would involve shifting some of those functions into the Information Technology, Legal, and Public Works Departments, as well as the City Manager’s office.

Anderson also proposed renaming the Tacoma Economic Development Department to the Community and Economic Development Department, and placing an emphasis on community-based efforts such as city planning and development in neighborhoods and downtown. “It is essentially an attempt to clarify the purpose of the department through renaming,” said Anderson.

Indeed, community development is a cornerstone of the budget proposal. Anderson wants to use a $5.6 million surplus through 2007 to fund a community-based service program, internal auditor, and youth assessment and resource center. He also wants to forego a property tax increase in 2006.

The community-based service program would include two code enforcement officers, two community development specialists, and two police officers to address concerns and needs generated from a team of neighborhood residents.

Anderson admitted that his plan is focused on the short-term. “We’re basically trimming the top off the deficit,” he said, adding that the deficit will grow again beginning in 2009.

To that end, Anderson has favored a long-term plan that calls for elimination of property and B&O taxes, reduction of the utility tax, and introduction of monthly user fees for police, fire, and library services. Fees would be based upon building occupancy or property value, applicable to all property owners — including hospitals, non-profit organizations, schools, ports, and governments (but not houses of worship) — and charged monthly in an itemized invoice. User fees for police, fire, and library services would have to meet or exceed $150 million — the revenue currently generated from the city’s B&O and property taxes — to pencil out, and exceed that amount in order to gain ground on the projected deficit.

The plan lacks specific financial details, and has received mixed reviews from councilmembers. “I believe it’s an idea who’s time has not come,” said Councilmember Mike Lonergan, during a study session Aug. 17.

Still, councilmembers were generally supportive of Anderson’s overall plan during yesterday’s meeting.

“This is exactly what I was hoping for in clearly laying out a proposal to address the issue,” said Councilmember Rick Talbert. Though he told Anderson that he still had a number of questions about the plan, he added, “You have met the charge.”

“This is so refreshing and I want to thank you for your efforts,” said Councilmember Lonergan.

Tacoma Mayor Bill Baarsma commented on the proposed layoffs. “We knew going into this that it was likely we would have to make layoffs,” he said. “It’s a very difficult decision. I applaud you for including outplacement services. That’s a responsible thing for an employer to do, and not doing that is heartless.”

Anderson said that the decision to recommend layoffs was based solely on organizational goals, and not individual performance.

Anderson cautioned councilmembers that more work would be needed to continue to balance the budget. “This is a milestone, not a conclusion,” he said. “We still have large deficits on the horizon. It is not the end of the process.”

Anderson was hired May 24 largely based upon his cost-cutting efforts as a city manager in Des Moines, Iowa. Last year, the Tacoma City Council discovered a $29.6 million deficit while balancing its biennium budget. The council approved a two-year, $356 million general fund budget on Dec. 14, but with provisions that provided funding for one year toward services such as the Proctor District fire station and community liaison police officers. In addition, the city’s expenses have climbed over the past several years, the result of higher costs for wages and benefits, and a law limiting property taxes citywide.

Councilmembers are expected to finalize the new budget Dec. 13.

Full details of the City Manager’s budget proposal, including the slideshow and background materials, are available at http://www.cityoftacoma.org/tacomanews. Citizens can also submit their budget questions through the Web site. Anderson’s budget proposal will be considered by the City Council during three budget workshops. The first will be held 4:30 to 8:30 p.m. Nov. 10 in the Council Chambers on the first floor of the Tacoma Municipal Building, 747 Market St. The other meetings will be held 5 to 8:30 p.m. Nov. 16 and Nov. 30 in the Council Chambers. All three workshops will be broadcast live by TV Tacoma on cable Channel 12 in Tacoma and on CityPost, cable Channel 77 on Comcast and Channel 85 on Click! Replays of the workshops will be posted on the TV Tacoma Web site within 24 hours of the presentation at http://www.tvtacoma.com