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December 11, 2023

Cuts Loom to Balance City Budget

– Further cuts to city services are likely, say Hollister City
Councilmembers who are preparing to take up the unenviable task of
balancing Hollister’s budget – $3 million deficit and all – for the
coming fiscal year.
Hollister – Further cuts to city services are likely, say Hollister City Councilmembers who are preparing to take up the unenviable task of balancing Hollister’s budget – $3 million deficit and all – for the coming fiscal year.

“We’re going to have to be very stringent, we don’t have a lot of money,” Mayor Robert Scattini said Friday. “We’re probably going to have to make some cuts, no doubt about it.”

Hollister has a $3 million structural deficit – meaning the city spends $3 million more each year than it receives in revenue – that will devour the city’s approximately $6 million general fund reserves within two years. City Manager Clint Quilter has said that shoring up the city’s budget could require cutting city services – which have already been whittled down over the past few years – by as much as 20 percent. Though specific services have yet to be identified, public safety, recreation and street maintenance are all candidates for the chopping block, according to Quilter. The biggest expense for the city is salaries and benefits, he said.

Last year, the council adopted a $25 million budget, balanced with about $2 million from general fund reserves and about $1 million in one-time funds when the Hollister Redevelopment Agency bought two properties from the city. To balance a similar budget this without raiding reserves, the council will have to cut about 11 percent.

On Sunday, council members will have a preliminary discussion about priorities for the budget – a discussion that will serve as the foundation for budget hearings that will start in June.

Councilman Brad Pike said that the council will have to be unconventional in tackling the budget this year. Regardless of how creative the council is, he said, cuts that could affect city services are likely going to have to be made.

“For me it’s just to trim the fat, but not personnel. That may be very hard to do,” Pike said. “We need to be very creative and look at a number of alternatives.”

Solutions that Pike thinks the council should consider are working collaboratively with other government agencies to cut costs and reviewing department budgets line by line to determine what costs can be reduced.

Councilman Doug Emerson said that he is considering a two-pronged approach for balancing the budget. The city, he said, might do well to take half of the money needed to close the $3 million shortfall from reserves and make up the remainder with less severe cuts to city services.

“We can’t take another $3 million out of reserves,” Emerson said. “And $3 million in cuts (to services) is pretty drastic. It comes down to: are we not going to sweep streets or do maintenance on sound walls or not do maintenance at all?”

Though cuts to services seem inevitable, a 1 percent sales tax increase initiative that the council plans to put on the ballot for the November election could, if passed, generate enough additional revenue for the city to break even and even have an annual budget surplus. Quilter said that the tax increase, which would require voter approval, would generate an additional $4 million for the city each year.

Since the city can adjust its budget at any time, Quilter said he will likely suggest that the council not make any major cuts until voters have their say about the tax increase.

“I think in large measure, we will do a budget based on being as conservative as possible without doing anything drastic until we get that answer,” he said.

The increase, if passed would take effect in April, 2007 and expire after five years, Quilter said.

Emerson said that, even if the tax increase goes through, the council may still have to cut services in next year’s budget because the city won’t receive the increased sales tax revenue until later in 2007 when businesses report their sales to the state. Once the revenue from the increase starts rolling in, however, the city will be able to add services back, he said.

Luke Roney covers local government and the environment for the Free Lance. Reach him at 831-637-5566 ext. 335 or at [email protected]

Staff Report
Staff Report
A staff member wrote, edited or posted this article, which may include information provided by one or more third parties.

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