The Hollister City Council, while tentatively approving a $34
million budget on Monday, put its trust in a city manager with only
two months on the job.
The Hollister City Council, while tentatively approving a $34 million budget on Monday, put its trust in a city manager with only two months on the job.
Three of the five Council members agreed with City Manager Dale Shaddox’s draft budget – with no revisions – that would result in a projected deficit of $684,000 to the dwindling General Fund.
The scroll of expenses, awaiting final approval at the July 21 Council meeting, emerged from weeks of fiscal maneuvering by Shaddox.
Council members voting in favor of the budget reaching the final stage of approval included Mayor Brian Conroy, Pauline Valdivia and Robert Scattini.
“We’re in a (heck) of a position, and next year it’s going to be worse,” Scattini said.
However, several projects and services that were in jeopardy of being eliminated survived, including construction of Fire Station 2 and a new animal shelter, a $450,000 portion of an extensive pavement repair program and the General Plan update. The Council, however, also excluded several far-reaching expenses.
Most notably, the Council did not budget for the hiring of four police officers to flesh out a staff that, according to Police Chief Larry Todd, is plagued with morale problems partially caused by being over-worked. The city spent nearly $300,000 in police overtime during the past year.
Council members Tony Bruscia and Tony LoBue both expressed a desire to fund the additional police positions. Bruscia lobbied for two officers and LoBue for three.
“Make the cuts in different areas,” LoBue said.
Leaving those positions vacant would also lead to program cuts within the department, including a school resource officer and a crime prevention officer, Todd said. Funding the four positions would have cost about $300,000 next year, according to officials.
“These people will lose hope and faith that the Council supports what they do,” Todd said during the meeting.
The HPD had been prepared to hire two officers and was performing background checks on seven other candidates, said Todd, who expressed disappointment after the Council’s decision.
“I think it will have a very negative effect,” Todd said. “It’s a policy decision of the Council. The Council decides what level of services – whether it be in parks and recreation or whether it be in police. And they clearly made their decision.”
The Council also followed Shaddox’s recommendation and will not fill several other vacancies, including the utility manager and the city manager’s assistant.
As expected, the $15 million Civic Center project was also halted and may be canceled altogether, Shaddox said.
Before Monday’s meeting, Shaddox had accomplished his goal of presenting a balanced operating budget – while leaving the Council to decide the fate of several capital expenses.
The city has run up a deficit each of the past three years – dwindling a $15 million General Fund reserve to its current level of $9.3 million.
After last year’s budget hearings, the city had projected deficit spending for the year at $1.2 million. By the end of the fiscal year ending June 30, officials had approved spending that surpassed revenues by $3.3 million.
So the current projection for the coming year of $684,000 also has the potential for inflation, according to Finance Director Barbara Mulholland.
Shaddox has set $4.5 million as the point in the General Fund reserve the Council should avoid dipping below – at least until the wastewater problems are solved and the economy improves, he said. That means Shaddox believes the Council has $4.8 million of breathing room.
“How long are these current problems going to persist? How long should we make that $4.8 million last?” said Shaddox, who hoped the money endures for six years.
Also part of the city manager’s package, he recently identified ways to finance an additional $300,000 in projects without drawing from the General Fund.
He plans to reassign Animal Control operations to the HPD, which would qualify the new animal shelter as a public safety facility. Hollister could then fund a lease-purchase agreement on the $1.2 million building from the police impact fund.
“Every opportunity we’ve got to charge something to a fund different from the General Fund, we’re doing that,” Shaddox said.
Since the outset of the budget planning, Shaddox had planned to split funding for Fire Station 2 between the redevelopment agency fund and the fire impact fund.
Fire Chief Bill Garringer experienced good and bad news Monday. While the second fire station received its tentative approval, officials announced its construction would be delayed by up to six months because of difficulties receiving the land title. Shaddox said the scheduled completion would now be the spring of 2005.
The Council is waiting for a couple budget-related issues to be resolved. The state may take about $500,000 in vehicle license fees from Hollister, while the current draft budget included that projection.
The city also has a $1.6 million debt in its sewer enterprise fund. San Benito Foods has paid only portions of bills for the cannery’s use of the industrial wastewater plant during the past three years. Shaddox said the city would discuss the discrepancy with the food company soon.
