San Juan Bautista
– City Manager Jan McClintock said Friday that a prolonged
tourism slump is draining municipal coffers and that the city could
be broke in 12 to 18 months.
San Juan Bautista – City Manager Jan McClintock said Friday that a prolonged tourism slump is draining municipal coffers and that the city could be broke in 12 to 18 months.
The city has no financial reserves, she said, and if the money runs out, it could mean the end of San Juan Bautista as an incorporated municipality.
“The city’s financial situation is pretty grim,” McClintock said.
A special meeting to discuss the city’s financial situation was scheduled for Tuesday, but it was postponed at the request of the city’s auditor. McClintock the meeting will likely be rescheduled for sometime in the next few weeks.
Local store owners have been reporting a decline in tourist traffic – and the resulting sales tax revenue – for around 10 years, McClintock said.
“Even in years when it hasn’t gone down, sales tax has not in any way, shape or form kept pace with inflation,” McClintock said. “There haven’t been any upturns.”
That decline appears to be worsening. In fiscal year 2005-2006, San Juan Bautista received $398,000 in sales tax revenue. This year, she said, the city is on track to take in between $200,000 and $225,000.
The city operates with a $1 million annual budget. City Councilman Edward Laverone said the loss of sales tax revenue has been a huge blow to the city’s finances, because sales tax revenue accounts for almost half the city’s general fund.
“I believe San Juan is in a desperate situation,” Laverone said. “Over the next three to five years, we need to find ways to bring revenue into the city.”
The City Council has begun cutting back on spending by reducing hours at City Hall and the library and deferring raises for city staffers. The city is also hoping volunteers can step in to make up for reduced city services by emptying downtown trash cans and taking care of the city’s parks.
San Benito County Supervisor Anthony Botelho, who represents the San Juan Bautista area, said the county needs to help the city weather these tough times. He pointed out that the county recently agreed to pay $100,000 for repairs to San Juan Bautista’s community center, and he’s hoping there will be more opportunities for partnerships in the future.
However, in order for the county and other groups to help out, Botelho said the city needs to improve its track record in working with other agencies.
“There’s an inability to work with other agencies like the (San Benito County) Water District,” Botelho said.
Jim Gibson, co-owner of the Windmill Market, said he isn’t surprised that the city is having problems.
“San Juan has been operating for the last 30 years under the assumption that if it just didn’t do anything, people would come,” Gibson said. “I drank the Kool-Aid for a while, too.”
But the opposition of city residents and leaders to growth and development hasn’t paid off, Gibson said, and it’s time for them to accept a new strategy.
“If the city dies, they killed it,” Gibson said.
McClintock said there are signs of hope on the horizon. Revamped festivals, federal assistance and projects like the San Juan Bautista Artisan’s Plaza – which could itself be nixed due to the city’s growth restrictions – and development in the south San Juan Bautista area could give city coffers a shot in the arm, she said. However, McClintock added that there isn’t likely to be much of a payoff for at least the next two or three years.
“I hate to say it, but we may have to look at a sales tax increase,” McClintock said.
A tax increase could help tide the city over until the situation improves, McClintock said.
And if things don’t get better? McClintock said there is a risk that San Juan Bautista could become an unincorporated part of San Benito County in 12 to 18 months. Services like sewer, police and fire will likely continue in some form under county supervision, McClintock said, but there would be a real loss of local control.
“If that happens, there will be no local services, no local zoning, no local self-determination,” McClintock said. “If the county takes over, the county will take over and do what the county wants.”
City leaders and residents will have to make some tough choices in the coming months, she said.
“There’s light at the end of the tunnel,” McClintock said. “But if we don’t do something fairly quickly, the tunnel is going to collapse on us.”
Anthony Ha covers local government for the Free Lance. Reach him at 831-637-5566 ext. 330 or [email protected].
