New City Manager Dale Shaddox began work this week and was
immediately thrust into one of Hollister’s longest-dreaded
challenges
– balancing the city’s budget for the 2003-2004 fiscal year.
Shaddox must submit the final budget recommendation to the City
Council
– likely during the fourth week of June – and other city staff
members are
”
being very helpful in getting me up to speed,
”
he said.
New City Manager Dale Shaddox began work this week and was immediately thrust into one of Hollister’s longest-dreaded challenges – balancing the city’s budget for the 2003-2004 fiscal year.
Shaddox must submit the final budget recommendation to the City Council – likely during the fourth week of June – and other city staff members are “being very helpful in getting me up to speed,” he said.
“I promise to burn the midnight oil in reading all of these documents,” Shaddox said.
Last year, Hollister’s operating budget was balanced at $30.8 million, according to Finance Director Barbara Mulholland. This year, she said, that amount will escalate because of increased salaries.
Meanwhile, city officials anxiously await Gov. Gray Davis’ state budget revision May 15 – a document expected to heavily sway the number of slashed services and jobs locally. The state deficit for the coming year was projected at $34.6 billion in January.
“We want to make sure we preserve as much of the current funding for existing programs, before creating new ones,” said Assemblyman Simon Salinas, D-Salinas.
Speculation has surrounded several proposals for statewide cuts to local jurisdictions since Davis’ initial proposal in January. Until next week’s revision, officials can only surmise what cuts will be implemented.
For instance, Shaddox said Hollister would probably not lose – as initially proposed – $1.9 million from a controversial transfer of vehicle license fee backfill to the state. Although the VLF funding will likely be transferred to the state, vehicle registration fees will increase for residents to offset the lost revenue to the city, she said.
However, officials said several costly proposals would be included in the final budget, including a loss of about $34,000 the state previously reimbursed for booking fees Hollister pays to the San Benito County Jail.
The Hollister Redevelopment Agency has already taken a $186,000 hit because of statewide RDA shifts totaling $75 million over two years.
On the positive end from Shaddox’s early estimation, he shed light on Hollister’s consistent sales tax revenues during the difficult economy.
“Sales tax revenue is holding steady. We’re pleased with that,” he said. “Other communities, their sales tax revenues are dropping dramatically.”
Shaddox said the difference is that Hollister retailers mostly offer “basic services,” while many other cities depend on sales of luxury items. “They’re suffering the most,” he said.
However, Mulholland said there is no guarantee the state won’t take some, or even all, of the $3.5 million in local sales tax receipts for the year.
With all the complex factors to consider, Shaddox said, “We have a lot of work to do until then (late June).”
The planning process – which Shaddox called “fairly long and drawn out” – started with the work of city department heads, who were recently asked to prepare departmental budgetary requests. Shaddox and Mulholland will review those projections before meeting with the Council for hearings on consecutive nights during the second or third week in June, before the Council votes for approval the following week.
“I want to submit a balanced budget to the City Council,” Shaddox said.
Shaddox has two priorities for the city’s 2003-2004 budget process – wastewater treatment plant issues and taking a “careful look” at General Fund expenditures.
Others, such as Councilman Robert Scattini, just want to see money spent conservatively in the coming years.
“I’m not a tightwad or stingy,” Scattini said. “I’m looking beyond, and I think we have some really tough times ahead. We’re in a tough, tough situation.”
Salinas said the state’s current economic hardship will likely last another one to three years.
Councilman Tony Bruscia, and possibly other Council members, will go to Sacramento to lobby state legislators May 14 and 15. Cuts from the state are inevitable, Bruscia said, but he and other city officials hope the cuts aren’t severe enough to cause lost jobs or services in Hollister.
“The state’s budget problem is dire,” he said. “The last thing we want to do is cut jobs.”
Mulholland said Hollister may be forced to use a “small portion” of the city’s reserve fund – based on budget and economic projections – this year and in 2004. The city currently maintains about $50 million in that fund. However, much of that amount is earmarked for specific projects, such as Highway 25 improvements and street paving.
Among the city’s departments last year, Public Works received the most funding at $9.1 million. The police department was second at $4.9 million, and the fire department received $3. 5 million.
