Officials estimate savings of $570K this fiscal year
Five of six employee groups for the City of Hollister have
agreed informally to accept a 5 percent pay cut, a top city
official told council members Monday.
Officials estimate savings of $570K this fiscal year
Five of six employee groups for the City of Hollister have agreed informally to accept a 5 percent pay cut, a top city official told council members Monday.
City officials have been negotiating with employee representatives for more than two months and recently came to the informal agreements with five of them, with the police union the last remaining group in talks, City Manager Clint Quilter said.
Danny Hillstock, a city engineer and president of the general employees unit under the Service Employees International Union, called the discussions “preliminary talks” but said the city manager’s information presented to council members this week is “pretty much where we’re going.”
Employees entered into talks with city officials in light of continued deficits and a dwindling general fund reserve heading toward a virtual zero balance by the end of this fiscal year. The expected reductions also halt the 4 percent pay raises Hollister employees had received over the past two fiscal years, following voters’ approval of the 1 percent sales tax hike called Measure T.
The moves – expected to be made official once officials complete paperwork for employees – are set to save the city about $570,000 this year and another $800,000 in 2010-11. The lower amount in 2009-10 is due to the reductions occurring more than three months into the fiscal year.
Before the pay cuts take effect in November, the city and each group also must decide whether to employ basic reductions or furlough time.
“In some areas, it’s really difficult to do furloughs,” Quilter said.
In August, Quilter had pointed out how the city faced a deficit this fiscal year. To close the rest of the deficit beyond the pay-cut savings, officials plan to replenish the ailing general fund reserve by transferring over most of the revenue from the sale of the old Fremont School property to the county for the new courthouse.
The city’s Redevelopment Agency sold the property for slightly less than $1.4 million. Since RDA funds legally are restricted to economic improvements or affordable housing, officials devised a formula – assuming the lot would have produced a certain amount of tax revenue – to allow for discretionary use of the money in the general fund used primarily for employee compensation.
They came up with a split of 87 percent going to the general fund and 13 percent heading back to the RDA, Quilter said.
With the additional injection, the general fund reserve would increase to $3 million this fiscal year. If conditions don’ improve, however, officials estimate it would be at around $767,000 by 2011-12, according to a report given during the meeting.
