With city officials facing a bombshell of a budget projection
once Measure T expires after 2012, they should hold on to every bit
of reserves they can and make the necessary cuts to keep the safety
net in place.
With city officials facing a bombshell of a budget projection once Measure T expires after 2012, they should hold on to every bit of reserves they can and make the necessary cuts to keep the safety net in place.
Council members last week received a mid-year budget report that spelled the most dire projections yet since voters approved of the 1 percent sales tax called Measure T in late 2007. On the current path, Hollister faces a $7.1 million structured, annual deficit awaiting decision makers in three years. For perspective, that’s nearly half of the entire general fund budget.
Those projections, meanwhile, also include the continued use of dwindling reserve funds to patch the problem while officials dearly hope the economy turns around. The practice must stop now, because it’s the fiscal equivalent of taking you’re last $1,000 to the Las Vegas craps tables, and we encourage city council members to establish a policy that requires that a certain minimum dollar amount will remain in reserves. A floor ranging from 10 percent to 15 percent would make sense.
This is a more serious situation, frankly, than staff leaders and council members appear to perceive it as being. City Manager Clint Quilter in pushing a calming tone about future prospects, for instance, continually notes how the opening of one major retailer such as Lowe’s would offer a boost toward turning around Hollister’s sales tax slump. He even threw out how three to five major retailers would really improve the situation.
And if Disney opens a theme park next to the Hollister Municipal Airport, the city might even get out of the red one day.
City officials must stop basing their financial prospects on theoretical possibilities that appear less and less likely to occur as time goes on. Hollister would be lucky if Lowe’s breaks ground in the next two years. A potential that isn’t even a sure thing – some might call it a long shot at this point – most certainly should never play into responsible budgeting practices.
Quilter does neither council members nor the unions any good by selling such ideas as prudent reasoning to continue toward a disaster. Council members, meanwhile, have yet to wake up and realize they should be in crisis mode. The alarm has been going off for two years, and it’s getting louder and louder.
At this point, it appears there will be no other choice at some point than massive layoffs and deep pay cuts. It’s only a matter of when.
That said, it also is time for the unions to step up and realize the well is dry and there’s no activity in the revenue forecast for years to come.
Deep, across-the-board pay cuts are necessary beyond the 5 percent rollback broached in near-finalized talks. The numbers don’t lie. It simply isn’t enough.
Even with significant sacrifices, the city under current projections still has more bleeding to stop. Requiring a minimum reserve is the most responsible start toward repairing the problem for good.
