Council breezes through budget study session

Gilroy Mayor Al Pinheiro, right, and City Councilman Peter

The Gilroy City Council burned through a budget study session in
less than two hours Monday night, its only brief road block coming
in the form of verbal barbs between Councilman Peter Arellano and
Mayor Al Pinheiro. Full article
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The Gilroy City Council burned through a budget study session in less than two hours Monday night, its only brief road block coming in the form of verbal barbs between Councilman Peter Arellano and Mayor Al Pinheiro over whether to give additional funds to the city’s economic development and tourism arms.

In fact, Council members were so satisfied with the information they received Monday they agreed to cancel a second budget study session that had been scheduled for 6 p.m. Wednesday at City Hall.

The Council can approve the new two-year budget as early as Monday, May 16, its next scheduled regular meeting.

By a 6-1 show of thumbs Monday night – Arellano was the lone dissenter – the Council also agreed to add several amendments to the two-year draft budget, including additional funding for the Gilroy Economic Development Corporation and Gilroy Visitors Bureau, as well as a “development center manager.”

“We need to look to the future and poise ourselves in a position to be ready for the development that’s going to come,” Pinheiro said.

But any additions to the current draft budget will push city closer toward an unbalanced budget, something Councilman Perry Woodward said he couldn’t support.

As of Monday, the city’s proposed cushion for the 2011-12 fiscal year stood at just over $379,000, a figure that’s expected to shrink by as much as $300,000 with the proposed amendments.

Woodward and Pinheiro, though, agreed the city could use some of its reserves to cover funding needs.

At the beginning of the study session, City Finance Director Christina Turner trekked through the highlights of the proposed two-year budget draft, including an elimination of furloughs, projected additional revenues from climbing sales tax and a “cautious and conservative approach” to new development.

Turner also said property taxes would see a slight growth in the next two years as property values were expected to increase slightly.

The Council had no questions for staff following Turner’s presentation on revenues.

When it came to talk expenditures, it was a different story.

Under the proposed budget, the city would increase funding from $96,000 to $160,000 a year for the economic development corporation and from $160,000 to $200,000 a year for the visitors bureau.

Those figures will increase, though, if the city approves the amended budget next week that would offer even more assistance.

In a letter from EDC President Tammy Brownlow and board Chairman Kurt Michielssen, the EDC has asked the city for $200,000 for the next two fiscal years, while a letter from visitors bureau executive director Jane Howard seeks $300,000 for the same period.

An extra $100,000 was also requested to pay for a second phase of way-finding signs, which actually could be paid for with funds from the current fiscal year, City Administrator Tom Haglund said.

Howard also excitedly hinted at the bureau’s new marketing campaign, “Stay and Play in Gilroy.”

Arellano, however, said he didn’t agree with using hundreds of thousands of dollars to fund the EDC and visitors bureau when the money could be used for public safety or funding programs that could be eliminated from Gilroy’s schools.

“I think it’s a shame. And I think it’s a slap to our employees and our citizens and our children,” Arellano said. “If we have extra money, then we should step up and try to cover some of the programs that the schools cannot provide. And that’s where I think our money should go.”

He also said, “I’m looking at making our streets safe again,” and stressed the city needed “more police” and “more jails” instead of funding the EDC and visitors bureau.

“It’s not something that I’d be willing to support,” Arellano said.

Pinheiro didn’t pull punches in his response.

“For as long as you’ve been here, I thought you would understand the budget a lot better than you seem to,” Pinheiro told Arellano.

Pinheiro said he couldn’t disagree more, pointing to the EDC and visitors bureau as examples why the city had begun to climb out of a recent recession.

“You’re putting your dollars out to get a return,” he said. “That’s not uncommon.”

He added, “If you read this budget, you wouldn’t be talking like that.”

Woodward agreed with Pinheiro, saying the proposed operating surplus would help cover the additional funding.

Arellano later asked if the city could spare $77,000 to fully fund a traffic officer for the Gilroy Unified School District. The GUSD currently pays for half of that position’s salary, Gilroy Police Department Chief Denise Turner said, though it’s not clear whether that job would make it through district budget cuts.

Councilman Dion Bracco said the city needed to be wary of approaching its new budget with the thoughts of “happy days are here again.”

“I think we need to approach this with caution,” Bracco said.

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