The City Council on Tuesday begins budget hearings to examine
spending for the 2003-2004 fiscal year. City Manager Dale Shaddox
finished his budget proposal and distributed it to Council members
Friday.
The City Council on Tuesday begins budget hearings to examine spending for the 2003-2004 fiscal year. City Manager Dale Shaddox finished his budget proposal and distributed it to Council members Friday.
With his extensive scrutiny of city expenses completed, Hollister faces the likelihood for a “substantial deficit” – money that will again be taken from a General Fund reserve that diminished from a high of $15 million in 1999 to $9.3 million.
At the current rate, Hollister would erase its safety net within three to five years.
“There will need to be a redefinition of resources,” Shaddox said.
All signs for the coming year point to job cuts, decreased services and shelved projects, according to officials.
Even with inevitable cuts on the way, the city’s financial outlook beyond this year is even worse than 2003-2004, according to Shaddox. Regarding the possibility for a balanced budget in 2004-2005, he said, “I’m not confident at all.”
Namely, Shaddox revealed on Friday he excluded the General Plan update – a long-awaited and overdue $519,000 project to rewrite the city’s blueprint for growth. The year-long General Plan process, widely considered by officials to be necessary and urgent, has been underway since its approval in March.
“I simply could not balance the budget and keep that project included,” Shaddox said.
Shaddox’s day-to-day operating budget is balanced. As planned, however, he left out a pool of capital expenses for the Council’s choosing, many of which he has called “essential.” Along with the General Plan, his list includes the Civic Center, Fire Station 2 and relocation of the animal shelter.
“Whoa,” said Mayor Brian Conroy on Friday about the possible elimination of the General Plan. “We need to do the General Plan,” he said.
However, he added, “I’d be open to that recommendation.”
The General Plan was last updated in 1995, and the state strongly advises a renewal every five years to accommodate constantly changing dynamics of urban areas.
Shaddox’s proposal to halt the Civic Center project – a $14 million endeavor to bring city departments and City Hall into one building – was based on its relative lack of necessity. The Civic Center, Shaddox said, should be delayed for a minimum of three years.
“I can’t even predict when we’ll reconsider it,” Shaddox said.
But Fire Station 2 is not as expendable, he said. The city would pay for part of its construction from the Redevelopment Agency Fund, which can only be allocated to certain types of expenses.
Once it is built, however, the projected $844,000 annual cost to run the station must be paid from the General Fund.
“Fire Station 2 is a very, very high priority for the town,” Shaddox said. “He (Fire Chief Bill Garringer) is just nervous as heck I’m not going to be able to get it done.”
Some officials have even mentioned the recently renovated Veterans Memorial Building as a fiscal liability. While the building was refurbished with RDA money, it will carry a projected $173,000 operating deficit for the coming year.
“As far as staffing goes, that really needs to be looked at,” Conroy said.
The Council must make cuts, according to officials. And even then, there will be a significant deficit.
As a partial solution, officials have mentioned leaving vacant city positions unfilled – excluding the vacated police chief, airport manager and staffing positions for the Veterans Memorial Building.
The other vacant positions include four police officers and the utility manager, among others.
In his draft budget, Shaddox included filling all positions. But he will advise that the Council leave most of those jobs unfilled. Shaddox is even recommending the city manager’s assistant position be cut from the budget.
Leaving most positions vacant, he said, would save about $500,000. And he said layoffs of currently occupied jobs are possible, too.
“I’m not confident as I sit here we won’t have to have layoffs,” Shaddox said. “I’m that nervous about it.”
Since Councilman Robert Scattini started his tenure in January, he has continually questioned city spending, especially its frequency of hiring consultants.
“We need to put the brakes on,” said Scattini, who has advocated a hiring freeze for months. “Don’t fill (a position) unless it’s really a necessity.”
Other Council members insist they have approved projects in recent years unaware those expenses were swelling the city’s deficit spending.
Late last year, Finance Director Barbara Mulholland told the Council the 2002-2003 budget was balanced. On Friday, Shaddox revealed the city – in May 2002 – had already projected a $2.1 million deficit for the recently completed fiscal year.
“We’re all surprised by the draw down (deficit),” Conroy said. “We’ve been thinking it’s a balanced budget – every member of the Council.”
Conroy said both poor planning and unpredictable circumstances – including the dismal economy and cease and desist order – are to blame for the city’s deficits.
The budget hearings – that are open to the public – will include Council members and department heads discussing the needs of the city. The meeting Tuesday begins at 6 p.m.
