The city council passed a budget Monday that will maintain city
services at last year’s levels, but the city is still spending more
money than it is bringing in.
Hollister – The city council passed a budget Monday that will maintain city services at last year’s levels, but the city is still spending more money than it is bringing in.
The $25.8 million budget is balanced with about $2 million from the city’s $9 million general fund reserves. The spending plan trims operating costs for things like phone usage and office supplies, but there were no lay-offs.
“We’ll maintain services at the status quo. We’re not doing any lay-offs, ” Councilman Doug Emerson said. “I don’t like it, but I think it’s the best we could do right now.”
The city’s reserve fund hit a high of $15 million in 1999 and has been gradually whittled down since. And were it not for two one-time shots in the municipal arm, things would have been much worse this year.
City officials plan to transfer about $950,000 to the city’s reserve fund. That move reduced what would have been a $3 million deficit this year to about $2 million. According to City Manager Clint Quilter, the money has been gradually accruing over years from loan repayments.
Also, last month the city got a budget boost when it sold the vacant Fremont School and Fire Station No. 1 properties to the Hollister Redevelopment agency for more than $3.2 million. About half went to pay last year’s approximately $1.6 million deficit, with the rest going to the city’s reserve fund, where it is now being used to fill Hollister’s remaining $2 million deficit hole for 2005-06, according to Quilter.
Given Hollister’s built-in deficit, which could deplete the city’s reserve fund by 2008, council members are looking for new ways to generate revenue for city coffers.
Emerson, who is on the council’s ad hoc economic development committee, said he hopes the city will be able to create a marketing plan to advertise Hollister as a good place to locate a business that could be implemented when the sewer moratorium is lifted. Quilter reported to the council that, according to his time line, the moratorium will be lifted in November of 2007.
“What I hope we can do is work hard on a marketing plan for the next year,” Emerson said.
Another possibility for increasing the city’s revenue is raising the sales tax.
“We have one of the lowest in the state,” Emerson said.
Raising Hollister’s 7.25 percent sales tax would require voter approval.
“That needs to be considered,” Quilter added.
Luke Roney covers politics and the environment for the Free Lance. Reach him at 831-637-5566 ext. 335 or at lr****@fr***********.com.
