Contra Costa Times, by Paul Burgarino, May 18, 2010

ANTIOCH — For the first time, city leaders acknowledged the serious possibility that the city could be headed toward bankruptcy if it does not address its budget crisis.

“I don’t think it does any good to avoid the word or sugar coat it,” Mayor Jim Davis said during the third of several budget sessions directing the finance department on the 2010-11 budget.

At Tuesday’s study session, Antioch’s finance staff said $2.9 million still must be cut from the budget to maintain a 10 percent reserve fund. Officials project $34.1 million in general fund revenue for the 2010-11 fiscal year — about $10.5 million less than the city took in three years ago due to declining property and sales tax.

Antioch leaders whittled away at the deficit Tuesday, directing staff to implement a reduced budget for the city’s recreation department with the goal of making it self-sustaining by next year.

The council also asked staff to examine cost-savings measures for the Antioch animal shelter and to conduct a poll to see if the community would be willing to support a parcel tax.

Antioch leaders also gave the latitude to lower the city’s reserve level to between 8 to 10 percent to help make up the difference.

In 2009-10, the city laid off 28 employees, instituted weekly furloughs, and eliminated or reduced many services. Those measures must all stay in place for the foreseeable future, and more cuts are needed.