Aside from possibly losing the redevelopment agency
– including its programs and employees – Hollister officials
might have to deal with a ripple effect from the governor’s
decision to eliminate the program. That’s because nearly 7 percent
of all city employees’ compensation comes from the RDA fund,
according to an estimate provided by finance of
ficial Robert Galvan.
Aside from possibly losing the redevelopment agency – including its programs and employees – Hollister officials might have to deal with a ripple effect from the governor’s decision to eliminate the program.
That’s because nearly 7 percent of all city employees’ compensation comes from the RDA fund, according to an estimate provided by finance official Robert Galvan.
By standard, a majority of employee pay comes from the general fund. But there are cases where the city can justify paying portions of employees’ compensation out of other enterprise funds – such as those related to the sewer plant or the RDA – when those workers are assigned to related activities.
A recent Free Lance records request of payroll accounting for department heads during a two-week period in May showed that the city allocated at least 20 percent of the pay for most of those staffers from alternate accounts, including the RDA. That could be a problem in light of the state budget approved last week that largely eliminates the RDAs as they now stand.
The breakdown of fund accounts used to pay department heads includes the following:
– For Development Services Director Bill Avera, the city allocated 40 percent of his pay from the RDA; 40 percent from the Housing Set Aside fund (which is a function of the RDA); and 20 percent from the general fund, according to the records.
– For City Clerk Geri Johnson, 80 percent of her pay came from the general fund, with 20 percent from the RDA.
– For Galvan, 90 percent of his pay came from the general fund, with 10 percent from the RDA.
– For City Manager Clint Quilter, 80 percent of his pay came from the general fund, with 20 percent from the RDA.
– For City Attorney Stephanie Atigh, 80 percent was from the general fund, with 20 percent from the RDA.
– For the director of the airport and code enforcement, Mike Chambless, 100 percent of his compensation came from the airport enterprise fund. Galvan said on an annual basis, about 90 percent of Chambless’ pay comes from the airport fund, meaning 10 percent of his time is devoted to code enforcement.
As a whole, Galvan estimated that the city will budget allocating 63 percent of employee pay from the general fund, with the remaining 37 percent coming from other funds. Each year around July, Galvan said he reviews the year’s allocations with department heads to make and justify any adjustments. The percentage of pay from the general fund varies from year to year, he said.
“In a majority of cases, it works to the benefit of the general fund,” Galvan said regarding the adjustments.
Either way, the use of the RDA fund to pay for other departments’ employees might result in a need to make further cuts in order to balance the budget in upcoming years. The city allocates nearly $1.1 million in compensation from the RDA fund – or somewhere between 6.5 percent and 7 percent of the city’s total compensation figure, Galvan said. That also includes the compensation for the three full-time employees of the agency.
Officials have expressed doubt they would take up the state on its offer to allow some kind of “successor agency” because it would be too costly, with a requirement to pay millions of dollars in payments to other public entities in the area.
If the Hollister RDA does go away altogether, city officials can only hope that they get a decent return when it comes to how the state might divvy up any added property tax revenue.
“We’re not sure yet how the taxes will get divided if redevelopment goes away,” Quilter said. “If it gets split up as the rest of the tax base, how much property tax will there be to the city? Who knows?”
