Despite the state's $24 billion projected deficit Berkeley's financial situation is relatively stable, according to city officials.

"The good news is the city is in good financial shape and we have a solid budget," said Mayor Tom Bates during the State of the City luncheon on Tuesday.

Currently, Berkeley is facing an estimated $5.66 million deficit by July 2011, according to City Manager Phil Kamlarz.

Unlike other California cities, Berkeley will not lay off any employees in the next year. Instead, 47 vacant positions will be eliminated, departments will be reorganized and employees may be relocated to other positions, according to Tracy Vesely, city budget manager.

"We do long-term budget planning two years at a time, with a five-year forecast," Kamlarz said. "It puts us in a good position compared to other cities because we are able to look down the road."

However, despite good planning, Berkeley could lose an additional $4.2 million to $4.8 million in 2010 if the state decides to borrow property, gas and sales tax revenue from local governments, according to a recent budget update from city manager's office.

"There are so many uncertainties," Vesely said. "God only knows what's going to happen at the state level, which will really affect local government, we just don't know how."

To offset Berkeley's current $5.66 million deficit, public and mental health programs will face the biggest cuts, totaling about $750,000 for public health and $1.3 million for mental health.

Residents and members of existing public and mental health programs said there are better options than cuts.

"Rather than cutting programs that we value, I think we should think about across-the-board cuts to our biggest expense, which is employee

compensation," said Berkeley resident Barbara Gilbert.

Bobby Miller, a board member for the nonprofit addiction recovery program Options Recovery Services, said the cuts may force the program to start charging for its normally free services.

"The program is helping people get their lives back. I'm concerned about the budget issues that occurred at Options," he said. "Issues that have challenged our ability to continue to provide the free service."

Tags: CITY COUNCIL