Despite reports showing the city is not taking in as much
revenue as city staff had originally anticipated this year,
Hollister City Council members said Tuesday they were not yet
thinking of cutting employees or city-funded programs to make up
the difference.
Hollister – Despite reports showing the city is not taking in as much revenue as city staff had originally anticipated this year, Hollister City Council members said Tuesday they were not yet thinking of cutting employees or city-funded programs to make up the difference.
“We’re not in good shape. Our General Fund keeps going down, and that’s been a trend,” Councilwoman Monica Johnson said Tuesday. “I think that it’s going to take a few years for it to really get back on track because it’s taken this many years to get to where it’s at.”
Last year, the council was faced with making sharp cuts to the city budget and considered laying off 36 employees including the fire chief. This year, however, Johnson doesn’t see the council taking such dramatic steps.
“I think that we’re very lean. We had 170 employees last year; now we have 135. So I don’t think we have any room to cut back on staff,” she said.
New Director of Administrative Services Robert Galvan presented the council with an annual mid-year budget review late Monday night, breaking the news that in the first six months of the fiscal year, the city has brought in less than 30 percent of its predicted revenue. Ideally, halfway through the year the city would have closer to 50 percent of its anticipated revenue, according to Councilman Doug Emerson.
“When we did the budget, we projected there would be about $15 million in revenue. So if everything were picture-perfect, by Dec. 31 we would have collected 50 percent of that number, but we’ve only brought in about 28 percent,” Emerson said.
Instead of half of the projected $15 million-plus, or around $7.5 million, the city actually only had around $5.8 million in General Fund revenues at the end of 2004. That’s is 28.6 percent of the projected General Fund revenues. At the same time last year, the city had made just over 43 percent of its projected General Fund revenue.
According to a staff report, “This is of major concern in that staff is not confident of the City’s ability to account for 100 percent of its budgeted revenues at year end.”
In other words, Councilman Brad Pike said Tuesday, “We’re going to have to be very frugal with our spending.”
But, Emerson and Galvan added, there’s hope this discrepancy could be mollified soon.
“There are a couple of things that are going to mitigate that, and one of them is a one-time revenue payment from the state, which should be around $1 million. The other thing that’s going to help is that our expenses are down lower than 50 percent as well,” Emerson said.
Galvan said Tuesday the city had received the state payment in February, so it hadn’t been included in the budget as of Dec. 31.
“All this basically is, is just a progress report. It’s not in any way intended to substitute a budget request or do anything other than provide snapshots of the city’s budget to the council,” he said. “When we do the reports for January and February in April, that will give us an even better picture of what’s in the General Fund.”
Galvan did not discuss laying employees off, cutting programs, or delaying raises for existing employees Monday, and said this would not happen any time soon since the budget is continuing to progress. Galvan is aiming to give the council a budget update every month starting soon.
Jessica Quandt covers politics for the Free Lance. Reach her at 831-637-5566 ext. 330 or at [email protected].
