Willits Braces for Layoffs as Consultant Prepares a Strategic Plan to Reorganize the City

"There are those of us who will not be here in the future.”

Photo of the Willits gateway courtesy of Thomas Hawk

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A week before Christmas, interim City Manager Robert Richardson called an all-hands meeting of city employees.

“I don’t want to sugarcoat this,” Richardson told them. “There are those of us who will not be here in the future.”

Richardson, who had himself been hired just 16 days earlier, said he wanted to set expectations about potential layoffs and explain why cuts were coming. After months of warnings about the city’s financial woes, change was coming quickly for the roughly four dozen people employed by the city.

Employees took the news quietly, asking few questions.

Richardson said he planned to spend January learning how the city operates — who does what, and why — and identifying positions that could be consolidated or reimagined. In February, he said, he would present a proposed strategic plan to the City Council.

Once the plan is approved, Richardson said he would meet with the bargaining units that represent city employees. Employees whose jobs are targeted in the reorganization would receive 21 days’ notice. If Richardson’s timeline holds, notices would go out by the end of February.

Employees who receive notices and qualify for another position within the city would have five days to decide whether to accept the job.

In response to questions, Richardson assured employees that the city would not contest unemployment claims, as it has done in the past.

“The council is pretty much mortified by this,” he said. “They have a lot of personal relationships here. They like you. I don’t see them taking any punitive action against the personnel going through this.”

At the same time, Richardson indicated that employees who had spoken up in the past, may have reason to be worried. “Reorganizations can be fun,” he said. “But they’re really for people who like to work a lot differently than we do. Differently than most cities work. But people have to be very flexible. They have to be incredible team-oriented. They cannot be people who have difficulty with others.”

In private conversations, employees pointed to long-standing management issues and a lack of accountability for decisions that transformed Willits from a city with a balanced budget into one that routinely spends about 50% more than it takes in.

Employees also noted the complexity of the financial picture Richardson described. His framing assumes that the city’s general fund pays 100% of salaries for employees outside public safety. In reality, about 56% of non-public-safety salaries are paid through fees collected by the city’s water and wastewater services and taxes allocated to those divisions.

Water, wastewater and public safety are the three core government functions the city provides.

According to budget documents, the Water Enterprise Fund is projected to bring in $3.58 million in revenue this fiscal year while incurring $2.59 million in expenses — including salaries, benefits, insurance, rent and debt service — leaving nearly $1 million. The Wastewater Enterprise Fund is projected to take in $5 million in revenue and incur $4.54 million in expenses, leaving about $462,000.

The apparent surplus in the Wastewater Enterprise Fund, however, disappears when transfers for capital improvements are taken into account. The largest is a $3.7 million transfer from the Wastewater Enterprise Fund in the current fiscal year to pay for a solar project approved by the City Council in June 2024.

At the time, council members were told the water and wastewater funds held about $5.7 million and $5 million in cash, respectively. The solar project was projected to generate $5 million to $7 million in savings over 20 years — assuming annual PG&E rate increases of 2% to 5% — and to qualify for about $1.8 million in Inflation Reduction Act incentives.

Under state law, utility service fees must bear a reasonable relationship to the cost of providing service. Cities may not charge rates simply to generate surplus revenue unrelated to costs.

A year and a half later, an employee said that investment — which could eventually reduce wastewater rates in the late 2030s — appears to now be coming at the expense of jobs.

A $203,492.85 change order for the solar project, approved by the council at its Jan. 14 meeting, prompted comparisons of the amount to the cost of salaries.

“I went through all our current openings,” employee Nici Caldwell told the council. “We’re looking for a city manager paying between $137,000 and $176,000. A police officer position pays between $43,000 and $59,000. A community service officer position pays between $53,000 and $64,000.”

She added that the city’s lowest-paid employees — operators-in-training hired with no prior experience — earn about $39,000 a year.

Caldwell also criticized the city for preparing to lay off modestly paid workers while hiring consultants whose hourly rates equate to annual salaries of roughly $145,600 to $364,000.

Mayor Tom Allman responded that the consultant’s role was to ensure employee rights were respected and to protect the city from legal claims that could result from the re-organization.

Earlier in the meeting, Allman accepted a nomination to continue serving as mayor. He comments reflected the gravity of the city’s current financial situation.

“In the next 90 to 120 days, this council is going to make some really tough decisions,” Allman said. “Those decisions will be made as a team, with as much input from the public and from employees as possible. I appreciate the trust you’re placing in me — but this is not a banner year to be on the council, or to be mayor. We are not flush.”