Some of Hollister’s 175 city employees will be laid off, some
will swap positions and others will be asked to retire early. The
city will raise impact fees and maybe other taxes. An array of
services will be pared down or vanish altogether.
Those were some of the considerations discussed by City Council
members and other officials this week at an informal retreat. Much
of it revolved around the urgency to make up for a potential $6.3
million shortfall in the budget. The meeting, held Wednesday night
at the Veterans Memorial Building, was the first gathering of a
two-part retreat; the second roundtable of talks will take place
Oct. 22.
Some of Hollister’s 175 city employees will be laid off, some will swap positions and others will be asked to retire early. The city will raise impact fees and maybe other taxes. An array of services will be pared down or vanish altogether.
Those were some of the considerations discussed by City Council members and other officials this week at an informal retreat. Much of it revolved around the urgency to make up for a potential $6.3 million shortfall in the budget. The meeting, held Wednesday night at the Veterans Memorial Building, was the first gathering of a two-part retreat; the second roundtable of talks will take place Oct. 22.
No official decisions were made Wednesday, but Council members conceded that several drastic steps must occur by next summer’s budget sessions.
“We’ve got some tough challenges ahead of us,” Councilman Tony Bruscia said after the retreat. “We have to find some solutions and it’s not easy.”
Specifically, Shaddox laid out preliminary cost-cutting strategies, including the possibility of dismissing more than 30 employees. Another potentiality discussed, however, included asking city employees to take pay cuts and others to retire early.
Making the situation even more complex: All of the contingencies under consideration, while affecting employees’ lives and families in various capacities, also carry a spectrum of cost savings.
“It’s going to be an extremely complicated exercise and we’re about to move into that,” Shaddox told the Council members.
In a summary distributed at the retreat, Shaddox explained Hollister could cut its shortfall – or the amount needed through personnel cuts to balance the budget – to about $2.5 million.
That assumes the city will dip into its dwindling General Fund reserve for $1 million. In addition to that, under Shaddox’s plan, the Hollister Redevelopment Agency would purchase the downtown fire station and Fremont School, both owned by Hollister. The RDA can afford to do that because it is financially sound after a $35 million bond sale in July.
Shaddox said he plans to meet with city employees soon – as a group and individually – to receive feedback from them about the idea of taking pay cuts or accepting a retirement deal. Bruscia suggested to Shaddox the city shoot for a goal of laying off 20 employees and compelling another 20 to retire.
“I might be able to do a little bit better than that actually,” Shaddox replied.
Regardless, officials would like to make decisions regarding who goes, who stays and whose job changes by the end of the year, according to Shaddox. That would give about six months notice to anyone laid off.
Officials also briefly discussed the possibility of raising taxes – mentioned Wednesday were possibilities of placing measures on the ballot to increase sales taxes, motel taxes and utility user taxes. Some officials, like Councilman Tony LoBue, were not receptive to that idea.
“I’m going to have a really hard time putting anything on the ballot to raise taxes,” LoBue said.
With that, LoBue also emphasized a need to maintain an adequate level of services in the city, which would mean dipping further into a General Fund reserve that will soon drop below $9 million. Officials do not want to dip more than $1 million a year because the city’s economic forecast for the coming years remains dreary.
At one point, Councilman Robert Scattini blasted former leadership, including other current Council members at the table, for allowing the city’s finances get to the current situation. Scattini was elected in November of last year.
“Didn’t you guys know the country was in a bad situation back then?” Scattini said.
Bruscia said state leaders largely underestimated deficit projections through the November 2002 elections. LoBue blamed misinformation from city staff because, he said, “I was under the impression we were operating in the black.”
In another attempt to generate added revenues, officials talked about raising a cluster of fees charged to residents. The Council is scheduled to consider contracting a consultant for $130,000 Monday to study about 20 fees and rates during the next six months and update them. Many of the charges haven’t been updated since the mid 1980s.
“The method of arriving at the numbers has to be legally defensible,” City Attorney Elaine Cass said.
