Measure T and previous service cuts make situation not as dire
as in other areas
It’s hardly a rosy outlook, but the City of Hollister’s mid-year
budget review does indicate that it is in better shape than many
other jurisdictions, thanks to the buoying affect of the Measure T
sales tax as well as previous downsizing efforts.
That one-cent tax, scheduled to expire in 2013, provides roughly
$3 million in revenues to city coffers each year. That accounts for
more than 20 percent of the city’s annual $14 million general fund
budget.
Measure T and previous service cuts make situation not as dire as in other areas
It’s hardly a rosy outlook, but the City of Hollister’s mid-year budget review does indicate that it is in better shape than many other jurisdictions, thanks to the buoying affect of the Measure T sales tax as well as previous downsizing efforts.
That one-cent tax, scheduled to expire in 2013, provides roughly $3 million in revenues to city coffers each year. That accounts for more than 20 percent of the city’s annual $14 million general fund budget.
Officials are now projecting a $2 million general fund reserve at the end of the fiscal year, in June.
“Measure T has allowed us not to eliminate about $3 million worth of services,” said City Manager Clint Quilter, who presented a budget report to the city council in late February. “We are preparing one way or another for when Measure T ends. We’ve kind of right-sized our organization to deal with our situation given our current revenue and expenditures. The difficult part is preparing for when that sales tax goes away in 2013.”
In the report to the council, Quilter – along with Administrative Services Director Robert Galvan and Accounting Manager Brett Miller – noted that “just three years ago, we characterized the city’s fiscal outlook as the best in many years.
“Unfortunately, this is not the case today,” the report stated. “Stated simply, the city is facing another very tough budget season.”
Calling the Measure T revenues a continued “bright spot” in the budget, the report said all of the other “bright spots have darkened from three years ago.” Ahead of this year’s budget, the city cut approximately 12.5 percent from general fund expenditures and now is only proposing mid-year budget requests that are “essential.”
The sluggish federal and state economies have trickled down to local budgets, with tax revenue lagging in recent years. Gov. Jerry Brown’s proposed elimination of California redevelopment agencies was also noted along with other “budget cut gimmicks” that could threaten local funding.
Local property tax revenue estimates have been reduced by $100,000 – to $830,000 – since a January report to the council, though sales tax projections have been increased by $100,000, in part due to tax revenue from higher gas prices.
The city in June 2009 implemented a “hiring chill,” Quilter said, which has since turned into a “hard freeze.” That does not mean, however, that the door will be shut on any new hires.
Budget decisions facing Hollister this year are potentially less drastic than in other cities in part because of cutbacks required during the local building moratorium, in which development was halted until the city built a new sewer plant.
“The moratorium allowed us to be ahead of the curve as far as right-sizing our organization,” Quilter said. “We pared things back. We’ve already been through it.”
The City Council and department heads will continue to shape next year’s budget in the coming months, with council review scheduled for May and adoption in June.
Though the council has not held formal talks on an extension of Measure T beyond its sunset date, it is expected to broach the issue by next year.
“We need to start preparing for the future,” Quilter said. “For anything this big and this impactful, voters need to weigh in on it one way or another.”
An extension of the tax would likely be on the Nov. 2012 ballot, if officials decide to pursue that course.
“Unless the economy performs significantly better than projected,” the mid-year budget report noted, “the forecast shows that we are facing a budget gap once Measure T sunsets in March of 2013. While the budget-balancing difficulties are facing us are significant, we go into the 2011-2012 budget process with a much better foundation than most cities in California.”
