The economic prosperity largely brought on by years of increasing numbers of homes being built in Los Ba&#241;os has stopped.</p><p>The city has been thrown into a financial crisis and 2008 will largely be remembered as the year Los Ba&#241;os became one of the nation's biggest victim's of the housing market collapse. </p><p>City Manager Steve Rath received affirmation of just how bad the local housing market had become when he and his staff were contacted this fall by the Wall Street Journal. The newspaper used Los Ba&#241;os as an example of a city that had once again started selling homes -- foreclosed homes. </p><p>At the time Los Ba&#241;os had an estimated 1,200 foreclosures, according to a letter Mayor Tommy Jones sent to the federal government. Less than two weeks ago Rath said foreclosures are at about 2,500 now and he expects to reach 3,500 by February. Rath has also said home values have declined in the city 65 to 70 percent and sales tax has dropped 16 percent since 2007.</p><p>"This is extremely serious. This is what we called the perfect storm," Rath said at a council meeting.</p><p>The city's financial woes appear to be leading toward layoffs and reductions in services and programs. In November Mayor Tommy Jones and Councilman Joe Sousa were chosen to form an ad hoc committee to find ways to trim the budget. </p><p>The two men, with assistance from city staff, came up with a proposal that eliminates more than 20 jobs and many programs and services.</p><p>The plan's layoffs include three police officers, a fire captain, permit coordinator, fleet clerk, recreation supervisor and a recreation lead clerk. The vacant positions proposed to be cut include four police officer jobs, a firefighter, three community service officer slots, two police dispatchers, an animal control officer, maintenance worker and a senior planner. In addition police Cmdr. Dan Fitchie will not be replaced after his retirement next year. </p><p>Also under the plan, a $20,320 cut in the contribution to the Chamber of Commerce, the elimination of the city's aquatics program and abolishing use of a video service are proposed. </p><p>Members of the public who are scared of crime increasing during the current recession were busy in December urging the council to not layoff public safety personnel. But the city's employees in the police and fire departments also spoke for themselves. </p><p>Officer Preston Jelen said his department has responded to 43,675 calls for service as of Dec. 16. Jelen said the department only has 28 field officers. </p><p>"That leaves us with 28 officers to fill the six shifts. You want to take three of those from us," Jelen said. "We are already running into what we consider advanced gang members. When you guys remove us you're going to create a vacuum. Once that vacuum has been filled with bad people, and we lose our foothole on these people, we will probably never get it back."</p><p>Jelen said if officers' jobs are cut Los Ba&#241;os will start breeding gang members.</p><p>Officer Vanus Warren focused his comments on his personal safety. </p><p>"I would like to know what you're going to tell my wife and kids because I got killed on a call because I didn't have enough back up? It was me and one other officer working in a town of 40,000 people," Warren said.</p><p>Robert Strauch, a fire captain, said he believes is a history of the city understaffing the fire department.</p><p>He said in Los Ba&#241;os there are times where two paid firefighters go out in the city to fight blazes when state law requires a minimum of three. He also said when the city sends a fire engine to assist other city's three firefighters are sent.</p><p>According to Strauch the fire captain position being eliminated will result in a firefighter being laid off. He said that can occur because the captain has seniority that allows the person to transition into the top level fire engineer position. Under that scenario personnel will keep getting bumped down in job title until the least senior firefighter is laid off.</p><p>At a Dec. 22 workshop Chief Financial Officer Melinda Wall presented the city's dire circumstances. </p><p>"Looking at our general fund balance you can tell that we're already in the red. In December we're looking at being a million in the hole," she said, adding that general fund revenue comes from property and sales tax.</p><p>The salaries for the fire and police departments are paid from the general fund, which has become a contentious issue. Some citizens are mad because personnel working to assist administration largely only have a fraction of their salaries paid by the general fund. Some people see that as unfairly insulating administration from being laid off.</p><p>Sousa has chastised members of the public for wanting to sacrifice some city departments for the benefit of one group.</p><p>"What I'd like to see is, 'This is what we can do,' not sacrifice everyone for the sake of one," Sousa said.</p><p>Other council members have taken a different approach. </p><p>"You're the wall between life and death," Councilman Tom Faria told police and fire department employees in December. "That's the basics. You risk your life. My job, I don't risk my life. I'm a teacher.I will support whatever we can do to save those positions so we don't drop our manpower."</p><p>Councilman Mike Villalta said,"I cannot support a budget that reduces public safety. We're going to need to find another way."</p><p>At the last City Council meeting Jones responded to criticism of the plan by calling for unity.</p><p>"When you deal with difficult times like this, (its) the one time you definitely don't play politics. Whatever your feelings are, you come together as a group and say let's get through this together," Jones said. </p><p>The council is expected to vote on the emergency budget revision plan Wednesday night at 7 p.m., 520 J St.