The Gilroy City Council got a gloomy view into the future this week, with a forecast of a storm of needs and not much money to handle them.
The city’s police department needs at least nine new officers to keep up with a growing population. The fire department needs a new westside fire house and nine officers. The city’s computer systems are limping along, 20 years out of date. City staff numbers have dropped while the population is growing significantly.
And that’s not the only bad news. Revenues are falling. The city gets almost half of its tax money from retail, and once-profitable stores are being knocked out of business by internet marketers nationwide.
“I wouldn’t say it’s gloomy, so much as sobering,” said City Administrator Gabe Gonzalez. “We have all these challenges and we need to start thinking about them and it will help better the city.”
The council heard pleas from the city’s staff In a study session Monday, preparing for budget hearings, asking for more hiring and services to help them do their jobs better. The city cut 33 full time jobs in the recession of 209-2010, or 11 percent of the 2008 staff, while the population has grown 16 percent to 56,000.
Crucial jobs lost include Information Technology workers, which dropped by 33 percent, from six to four positions, a cut that “ impacts their performance of critical support functions that allow the larger departments to maximize their capacity,” according to the staff report.
The city had 298 employees in 2008 and has 267 now, with many due to retire. Community Development is down 29 percent to 24 people planning and working on building in the city; Fire is down 17 percent to 40 people; Police are down 5 percent to 101 people.
The bad economy had other effects on operational capacity. Community Development
experienced a reduction in workload, which lessened the impact of the staffing cuts, according to the report. However, it was the opposite for law enforcement.
“During bad economic times, activity increases as does calls for service. However, with cuts in staffing, there was less officers to address the need. The Police Department identified the core
services, and focused on those. Reports taken remained flat during the recession, not because there wasn’t an increase in activity but because there wasn’t enough staffing to take all of the reports,” the report said.
One example of declining service is that police ask people who are victims of graffiti to take a picture of it and paint it over themselves, according to the report.
Acting Police Chief Scot Smithee said the department needs to upgrade its IT, give officers iPads and purchase a predictive crime program that tracks where crimes have occurred and predicts where they will occur in the future. The Fire Department needs $1 million for its new Glen Loma fire station and new officers to work there and support an area population that will grow by 1,500 families over the next couple of years.
The ratio of city workers to residents has decreased dramatically. There was one worker for every 162 residents in 2008 and there is one for every 212 residents now.
The city collects $48.3 million in taxes and currently spends $48.2 million. It has a reserve of $24 million for emergencies. The biggest chunk of the revenue–$16 million– comes from sales tax from retail stores, most notably big ticket items like cars and appliances. The rest is split between property tax and the transit occupancy taxes on hotel guests.
Sales tax is at best tricky, said Finance Director Jimmy Forbis, because it drops in a bad economy. The city needs to pursue other avenues to bring in stable revenue streams.
Council Member Daniel Harney, who works at eBay, said the internet and businesses like his, are wiping out retailers all over the country, making sales tax even less dependable.
“I’ve been telling them for a long time that we need to find other resources,” said Harney, in an interview. “Increased tourism, research and development. We can’t depend on car sales and retail clothes stores. The sector is getting clobbered by Amazon and e-commerce. We really need to diversify.
However, Harney took a contrarian positive spin on what some say is serious understaffing. “We have less police officers, but has that negatively impacted our response time? Has our crime rate gone up or down? Shouldn’t we be looking at that as a positive efficiency?”
The city also expects to get hammered by expensive retirements and pensions it will pay out for the life of its employees. The state retirement agency, CalPERS is raising the amount cities have to contribute, making it even trickier to hire needed new workers.
“Those pensions are going to kill us,” said Vice Mayor Dion Bracco. Finance director Forbis said just hiring nine police officers, with salaries and pensions at about $1 million apiece, would wipe out the city’s reserves.
“If our city services haven’t been impacted let’s invest our money in projects and things that will make our city more efficient and get things done with less people.”
The council will begin a budget review Monday and will have to prioritize what the city needs and where it will get the money to pay for it.
“If we don’t take proactive measures today that service demand is going to get away from us,” said Gonzalez.