Furlough-free city budget goes to Council for review

UPDATED: Proposed budget would end furloughs

The city’s proposed budget released Tuesday would bring an end
to furloughs and assume large jumps in revenue
– a stark contrast from two years ago when the City of Gilroy
laid off dozens of employees and
eliminated work days in an effort to cover a $5 million
shortfall.
City of Gilroy fiscal years 2012 and 2013 operating budgetvar docstoc_docid=”78580790″;var docstoc_title=”City of Gilroy fiscal years 2012 and 2013 operating budget”;var docstoc_urltitle=”City of Gilroy fiscal years 2012 and 2013 operating budget”;

The city’s proposed budget released Tuesday would bring an end to furloughs and assume large jumps in revenue – a stark contrast from two years ago when the City of Gilroy laid off dozens of employees and

eliminated work days in an effort to cover a $5 million shortfall.

“I’m highly encouraged by what I see,” Gilroy City Councilman Bob Dillon said Wednesday. “We’re not out of the woods, but I think we’re doing better than I expected at this point.”

The city would take a $1.2 million hit by eliminating furloughs, which have closed city offices to the public on Fridays since July 1, 2009, said City Administrator Tom Haglund, the budget’s architect.

He said employee salaries will be returned to prefurloughed status under the new budget, Haglund said, though cost of living raises would not be given. Approximately 20 to 30 of the city’s 234 employees will be eligible for “step increases,” or merit-based pay raises, which are factored into the budget’s personnel costs.

Projected additional revenue – including an almost 16 percent spike in sales taxes, millions of dollars in development fees and an increase in traffic fines – will help balance the city’s budget, Haglund said.

“The revenues have increased. We’re seeing a return to development,” he said. “We’ve just seen a warming up of the economy.”

By the city’s 2013 fiscal year, Gilroy likely will have recovered more than 40 percent of sales tax lost since 2007, Haglund said. The city saw steady growth in sales tax in 2010, capped by a 7.4 percent increase during the year’s final quarter, Haglund said.

“Gilroy’s sales tax figures infer that the City’s strong retail base as a regional destination for shopping has survived the recession,” Haglund wrote in a letter prefacing the budget.

As much as some championed the draft budget’s projections, they also hinted at retaining some caution with their optimism.

“I’m still not throwing my hands up in the air and saying ‘Oh, it’s all over, ‘ ” Mayor Al Pinheiro said. “I’m confident that we’re coming out of it. I’d rather be cautious and be surprised at the end at how well we did.”

Councilman Peter Arellano said he liked the idea of ending furloughs, but wanted to examine further just how the city would do so before becoming too excited.

“If we can do that and balance the budget, I think that’s great.” Arellano said. “But what do they say, ‘The devil’s in the details?’ I will need to see the details and see exactly how that can be done.”

The City Council will meet at 6 p.m. Monday and Wednesday at City Hall for special budget study sessions, which are open to the public. The city’s current fiscal year ends June 30, and the Council could approve the new budget as early as May 16.

Two years ago, the city eliminated 71 positions – 48 full-time and part-time, along 23 vacant positions – in an attempt to eliminate a $4.7 million deficit. Concessions from police and fire unions in the form of furloughs were needed to avoid layoffs, and the city erased a $1.6 million chunk by delaying fee reimbursements to developers and using reserves intended to buy, maintain and replace vehicles and equipment for police, fire and other city workers.

Based on what city went through two years ago, Pinheiro said he considered the new budget proposal “a comeback.”

“The icing on the cake, for the Council and staff, is that what we did two years ago made lots of sense. And it gives me a lot of satisfaction,” Pinheiro said. “This just reflects that the Council did the right thing.”

When asked whether the budget would allow for additional hires, Haglund said a full-time planning manager and recreation coordinator are in the cards.

The budget also calls for huge increases in revenue from the Gilroy Police Department.

The budget plans for more than $267,000 in vehicle and court fines for the next two years, about $100,000 more than the city budgeted for in fiscal year 2011. While the city prepped for $2,500 per year from parking fines during its last budget cycle, that figure is expected to jump to $42,000. The number of traffic tickets would continue to climb, according to the budget, reaching roughly 5,700 in 2013. In fiscal year 2010, officers wrote 3,316 traffic tickets.

GPD Sgt. Jim Gillio said the revenue jump would come from the addition of two new full-time traffic motorcycle officers the city obtained through grants. Gillio said a GPD traffic sergeant was also motorcycle certified and, as time permits, would also enforces traffic safety laws. A reserve traffic officer would also be deployed soon, Gillio said.

He said the predicted increase in parking fines were the result of officers focusing less time on abating abandoned vehicles and more time on parking violations.

“I think I once went six months without seeing someone getting a ticket in this town,” Dillon said. “Now I don’t go a day without seeing them.”

The city’s $21.4 million reserves aren’t likely to take much of a hit, Haglund said, as Gilroy will maintain approximately $20 million in additional cash, including $5 million for capital expenses.

The budget is far from final, however, Pinheiro said, as more organizations and residents might come forward next week asking for funding.

“Right now, there’s still so many questions to be answered,” Pinheiro said. “There’s still a lot of ifs.”

To view all budget documents, click here.

Transmittal of Annual Budget for Fiscal Years 2012 and 2013var docstoc_docid=”78580409″;var docstoc_title=”Transmittal of Annual Budget for Fiscal Years 2012 and 2013″;var docstoc_urltitle=”Transmittal of Annual Budget for Fiscal Years 2012 and 2013″;

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