In prosperous times, it makes sense to reward dedicated employees. With a national recession, a continually tumultuous local economy and a deficit-ridden general fund budget, the Hollister City Council’s decision to approve 4 percent raises – at an additional cost this fiscal year of $516,000 – was fiscally irresponsible and deflates the potential service boost from the Measure T sales tax.
City officials contended how employees had gone three years without across-the-board raises and, therefore, now deserve the healthy pay increases, even while other struggling communities are laying off employees and severely cutting back expenses, while the private sector falls into a recession, while local businesses falter, while there is no sign of a recovery anytime soon.
Councilman Doug Emerson explained that the public should think of the three-year contracts – 4 percent the second year and 2 percent the third – as a total raise of 10 percent over six years. He was part of the council – also including Pauline Valdivia, Eugenia Sanchez, Brad Pike and Monica Johnson – that approved the increases in 2008.
We could accept his way of thinking – as long as Emerson can show us where he escrowed the money over the past few years to fund the 4 percent citywide raises during an economic crisis. His and other council members’ logic runs contrary to common business sense that calls for prudence rather than payback during this historically fragile time.
Locally, the poor economy is nothing new. It has stalled the past six years, and so, with it, has the financial stability of city government. Layoffs, many layoffs, have been on the table through these difficult times. Many have been squashed as well.
While Emerson noted in defending the decision how employees decided to forego raises three years ago, he did not mention that part of the leverage swing over the years has included minimal layoffs for the unions in exchange for the now-uncorked wage freeze.
Hollister’s employees did actually get something significant from the deal. They kept their jobs. They kept their benefits. They all maintained employment security while their organization, in reality, struggled immensely.
Although council members point to the moratorium’s lifting last week because it allows for potential growth again, there remains a rock-bottom housing market and no sign of significant growth for years to come. Impact fees, regardless of economic conditions, simply cannot support financial sustainibality. The city learned this already, or should have, when its fiscal stability unraveled with the sewer spill and moratorium’s start in 2002.
Council members, meanwhile, made this important financial decision without getting or requesting a detailed analysis of the impact.
How can our elected leaders make sound, reasoned decisions without knowing short- and long-term effects of the raises, such as how they will curtail the service boost, or where they take the annual operating deficit – before the increases – of nearly $300,000?
Council members all too often, as they did in this case, make decisions that are based more on city staff’s interpretation rather than on detailed facts. The public, for the sake of Hollister’s future, deserves better.
