nancy@theacorn.com

City employees’ salaries are being used to fix a $3.2-million gap in the 2010-11 budget that begins in July.

How that’s going to work is yet to be revealed. A city staff report was expected at last week’s City Council meeting, but the report has been postponed until the June 22 meeting because negotiations with city employee unions haven’t been completed.

“Employee cuts are necessary,” assistant city manager Candis Hong said.

Hong and the city manager, city attorney, other executives and senior management have agreed not to take pay raises in 2010-11, Hong said.

The Thousand Oaks Management Association postponed increases for nine months, she said.

If all employee salaries are frozen, the city would save $1 million in the general fund, Hong said, adding that the 32 to 35 employees who are expected to take early retirement offers could save the city $3 million.

Last year’s $2.6-million budget gap was filled using short-term fixes such as spending reserves to keep the library funds balanced and finding excess money in one budget and moving it to another.

These budget gimmicks work short-term, in a pinch, but now the city must use permanent fixes, said finance director John Adams.

“We’ve taken away the low-hanging fruit,” Hong said.

Examples she gave included not replacing vehicles and using money from insurance liability claim funds and workers’ compensation.

Those fixes, Hong said, can only be done once.

Sales tax revenue has been down and is still unstable, Hong said, suggesting it’s time to rethink programs and other expenses.

Adding more automation at the library is one way to cut costs but keep down lines, she said.

“We’re looking for more efficiency,” Hong said.