Editor’s note: The Free Lance requested these guest views on budget management from mayoral candidates.
I will propose that the city council adopt an annual budget policy that defines Hollister’s goals and priorities based on the city’s current and forecasted economic situation. That policy should include provisions for an adequate emergency reserve and a long-term debt limit for the General Fund so we do not just pass an unsustainable burden on to future city councils. We must be very careful about how much borrowing we do and how much of our fund reserves we use to balance the annual budget.
Establishing policy goals by the council majority will help us stay within agreed limits. If the economic situation changes dramatically, the policy can be modified, but the council should not overreact to short-term, temporary, or one-time changes because those types of positive and negative effects tend to cancel each other out over the year. A modest and sustainable plan builds public and employee confidence.
If significant reductions are necessary, they should be implemented in a two-stage process. First, general operations and then cost reductions to comply with budget restrictions. General cost reductions that increase efficiently makes it less likely that we will have to make severe cuts when budget limitations become the overriding factor. Cost reductions due to budget limitations are the last resort because it means that needed services or operations are reduced.
I would ask the council to go through the budget twice, first to review general operation reductions that do not affect services and the second time to comply with budget limitations, if any remain after general savings.
Mayor Friend announced that he has met with the city employees and discussed several ideas for these issues. I believe it is critical to continue to engage the employees and the community so all their ideas are brought forward for consideration. I would ask the council to formalize and speed up that process by making revenue generation and cost reduction ideas regular agenda items.
Hollister’s budget documents can be greatly improved for use as a management tool. The budget document should include detail costs and summaries by category. For instance, most personnel costs are now listed only by total within each department; the budget does not indicate what each total includes such as the dollar cost of healthcare benefits, car allowances, CalPERS payments, or special programs.
The information is available, but it should be in the primary budget document to aid the council in managing costs. Detailed costs by category, such as the amount spent in each department on car allowances, cell phones, primary wages, standby payments, or overtime will help identify where the money goes and savings opportunities.
I would recommend that the council and staff spend more time on analyzing the projected revenue streams to determine if they are reliable and prepare to respond if we lose major streams. That means having a priority list of budget reductions. I do not believe in across-the-board department cuts for major reductions, we will have to target the least critical public services.
Another part of the budget process should be the systematic examination of the organizational structure and functions to determine if the city is top-heavy, doing core government work, or if we are lacking in critical skill or equipment. An investment in updated or new equipment or obtaining a certain skill may provide a large return in investment.
Special events such as the motorcycle rally or air show need to be treated as business enterprises, because that is what they are. They may not have to show a profit, but they cannot consistently have large losses – it defeats their original purpose. I would encourage the council to ask for written and detailed fiscal reports to determine if the proposals are sound. If you run special events like a business, then you have to examine them like a business.
In the case of services, it is important that wherever possible revenue generation be linked to the cost of a specific service and those costs kept under control. General operations such as the animal shelter are necessary and important; the public should be given the opportunity to vote on how those services should be funded, and the level of funding they will provide.
I believe those changes and others will give the city a more effective, more predictable, and a more transparent budget process and fulfill our obligation to provide services at an affordable cost within resource limits.
