Mayor’s View on Painstaking Fiscal Management

‘To say the Council rubber stamped the exempt study is just
plain wrong.’ It was closely scrutinized.
By Mayor Al Pinheiro

I just read your editorial entitled “City Raises and Reserves” and feel compelled to respond to the inaccurate portrayals.

First, it makes it sound as though the Council was only first aware of our financial situation two weeks ago. If you would have been following the budget process since 2003 you would have known that the city predicted five years ago that we would be having deficits in future years.

The Council and staff have been diligently working to solve these problems for the last five years. The good news, which you did not relate, is that the yearly deficits are decreasing and our fund balances are improving.

For example, in 2003 it was estimated that the General Fund reserve would be $11.8 million in 2006-2007. Through careful and painstaking fiscal management that reserve is now at $27.5 million. Also, in 2003 the yearly deficit for 2006-2007 was estimated to be $5.7 million. This year’s projection will be at $2.7 million.

We are making excellent progress because we are vigilant and have made some hard fiscal choices. But most importantly, it is because we have a sound long-term plan to solve our budget issues that we review and update every year.

Are we where we want to be? Not yet, but we are committed to continue to work on the problem in a calm, logical manner. It does no good to run around yelling and screaming predicting the sky is falling in, when what is needed is a reasonable, rational approach, just like the one we have been using for the last several years.

The editorial raises the issue of why was the exempt group agenda item on the consent calendar and makes it sound as though there is some grand conspiracy.

Please check the city records you will find that once negotiations are complete with each of our bargaining units, it has been the city’s practice that the final decision is on the consent calendar. Nothing was done differently. But as is always the case any Council member or member of the public can pull a consent calendar item and have a further discussion.

Now let’s talk about the exempt group raises. First, the paper has decided to scapegoat the employees of the city in general, and the exempt group specifically as being the cause of the budget problems, and maybe worse, the answer to solve the problem.

It is true that our General Fund budget is mostly made up of personnel costs. But these are the people who do their best to make you feel safe, to ensure your water is clean, to teach your child to swim, to make sure your house is built to code, and on and on. It is imperative that we have top-notch, highly competent individuals in all of our job classes.

All that occurred with the exempt group was a compensation/market study was completed to make sure we were competitive with our top managers, and technical professionals. These kinds of studies are done with each bargaining unit.

To say the Council rubber stamped the exempt study is just plain wrong. As part of our discussions with the exempt group, we met in closed session four times, and though I cannot legally relate the detailed discussions of those meetings, I can assure you that all of us closely scrutinized and evaluated the pros and cons of this decision.

The end result is that by having a fair compensation plan, not only for the exempt group, but for all our bargaining units, we are trying to assure this city of highly professional employees. If we achieve that goal, the taxpayers will reap the benefits many times over.

Again, the timing of the exempt group approval versus the budget discussions is being made to look like another conspiracy. I wish I had the time to dream up all these devious plots. Since the Council has known and been working on the deficit issue since 2003, there was nothing conspiratorial about this when this item hit the agenda. The reason it was on the April 16 agenda was, negotiations were over and it was ready for approval – that’s it.

Why not wait to approve the exempt group until the budget issues are resolved? Since we are in negotiations with one bargaining unit or another virtually all the time, when would we postpone it to?

The exempt group was the last of the groups that the city had to deal with over the last three years. We are currently in the second round of negotiations with the Miscellaneous Union, and will be in the second round with the Fire Union in the fall. However, there never has been a Gilroy City Council that balanced a city budget on the back on any one specific bargaining unit, and I will not break that sound precedent.

Anyone interested in writing a guest column may contact Editor Mark Derry at [email protected]