Salinas faces financial troubles


SALINAS, Calif. - The city of Salinas is at risk of bankruptcy. The city says rising employee pay and benefits are to blame. The costs are so high that now the city may no longer be able to foot the bill.

The issue was brought up at the city council meeting last night, the numbers presented to them were far from encouraging.

"How do we get this under control, how do we keep this city sustainable so we don't have to file bankruptcy?" said Salinas Mayor Joe Gunter.

Reaction Gunter Tuesday after getting a report that the city now has to raise millions of dollars to cover the cost of employee benefits.

"What we've been told is that we have to fund even more to make up a decrease in what the state thinks it's going to make on the retirement funds that are invested now," said Salinas City Councilman Steve McShane.

Thirty-five million dollars over the next five years to be exact. The city is currently paying more than 18 million in retirement benefits annually to its 600 employees.

City manager Ray Corpuz said part of the reason is that Salinas employees are living longer.

"In Salinas we have more people who are retired that we're responsible for than active employees," Corpuz said.

It's not only retirement plans costing the city. Annually, $5.8 million in overtime is paid out and more than $2 million in unused vacation time paid back to employees. 

Councilman Steve McShane says the city is already at work to make up the deficit.

"We're looking at plans to cut freeze, and ultimately do things more efficiently," said McShane.

Though Councilman McShane admits that the problem is serious he's still holding out hope for the future of Salinas.

"The important message to residents is the sky is not falling, we've gotten through rougher times before and we'll get through this," McShane said.

The mayor ended the meeting last night saying that he hopes layoffs won't be required but could also not rule them out.

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