Hollister
– City Council members increased the amount Hollister will pay
into the pensions of local firefighters by about 10 percent this
week, honoring an agreement made with the union more than three
years ago.
Hollister – City Council members increased the amount Hollister will pay into the pensions of local firefighters by about 10 percent this week, honoring an agreement made with the union more than three years ago.
The increase in Hollister’s contribution – which will cost the city nearly $200,000 in fiscal year 2006-07 – is the result of a 2003 Memorandum of Understanding between the city and the Hollister Fire Fighters Union. Though council members felt obligated to carry out the agreement, some are concerned about how it will affect Hollister’s finances. The city has an ongoing $3 million budget deficit.
“It’s hard, but it’s the right thing to do,” Mayor Robert Scattini said. “But how are we going to pay for it.”
The MOU called for local firefighters’ California Public Employment Retirement System pensions to increase from 2 percent of their highest salary to 3 percent upon retiring at age 50 – known as 3 at 50. The percentage is multiplied by the number of years a person worked as a firefighter for the city. For example, a firefighter with 20 years of service who retires at 50 years old will receive 60 percent of his or her highest pay.
Under the new agreement, the city will pay more than 25 percent of the 3 at 50 pension. Previously, Hollister’s share was about 15.6 percent. Firefighters’ 9 percent contribution to their retirement will remain the same. There are 25 employees of the Fire Fighter eligible for the increased pension, according to Administrative Services Director Robert Galvan.
Council members honored the same deal, also negotiated by their predecessors, for Hollister police officers about a year ago. With the same fiscal concerns then, however, the council held off on approving the increase for police officers. Citing both legal and ethical reasons, the council finally approved the agreement.
Councilman Doug Emerson said the increase to police pensions, which was negotiated in 2002, caught him off guard last year and he wanted to make sure the council had time to study the issue and that the community understood why the council was ultimately going to grant the increase.
Emerson said he didn’t hesitate to approve the firefighter pension increase because he knew it was coming, and it had been included in financial projections for the next fiscal year.
“We’ve known about it for a year,” City Manager Clint Quilter said. “It’s included in the program.”
As the city prepares to draft a budget for 2006-07, it is exploring the option of putting a 1 cent sales tax increase on the November ballot. Hollister’s 7.25 percent sales tax is one of the lowest in the region, and council members have said they support putting the tax increase before voters.
Quilter estimated that, if passed, a 1 cent sales tax increase would generate about $4 million in additional revenue for the city each year. The added income, he said, would allow the city to improve services, such as public safety and road repair, that have diminished over the past few years as the city has cut its work force by some 20 percent.
Suffering under a sewer moratorium – which prohibits new construction requiring sewer hook-ups – imposed by the state in 2002 after 15 million gallons of treated sewage spilled into the San Benito River, Hollister’s economic development has been brought to a near standstill.
While Quilter says the city will have a new sewage treatment plant by early 2008, thus lifting the moratorium, and city officials are working on a strategy to market Hollister to businesses seeking new locations, there are few options, aside from a tax increase, to boost the city’s bottom line and stave off cuts to city services, he said.
Without a sales tax increase, Quilter said, the city will have to cut services by another 20 percent in coming years. Though he said no specific services have been targeted yet, Quilter said that services such as public safety, parks and recreation and street maintenance are all at risk.
Luke Roney covers local government and the environment for the Free Lance. Reach him at 831-637-5566 ext. 335 or at lr****@fr***********.com
