GILROY
– The emergency call you place to local police and fire
departments may cost you money if the state’s budget crisis doesn’t
end soon.
GILROY – The emergency call you place to local police and fire departments may cost you money if the state’s budget crisis doesn’t end soon.
Charging fees for 9-1-1 calls is one of a number of “outside the box” solutions city leaders are toying with to stave off financial ruin.
So far, amid drastic money crunches at the state and county level, the City of Gilroy has been spared massive job layoffs and program cuts. However, California’s practice of siphoning local funds to Sacramento is putting Gilroy in a hole that will deplete the city’s “rainy day” reserve accounts by fiscal year 2009-10.
City officials are projecting a budget deficit for the 2004-05 fiscal year of nearly $2.9 million, reducing the city’s reserves to $19.5 million. At this rate, by fiscal year 2008-09, those same reserves will amount to less than $1.8 million.
In 2009-10, the city goes in the red.
“The city has always taken a stance of building reserves in good times so we can use them during the bad times. And that’s exactly what’s happening now,” City Administrator Jay Baksa said.
That was the sobering message Baksa sent Monday to City Council members, who under city law must approve a new budget by July 1. The 2004-05 draft budget makes no cuts in full-time staff but once again trims services and programs already reduced in 2003-04.
Baksa’s message was followed Thursday by Gov. Arnold Schwarzenegger releasing his proposal for spending in 2004-05.
The latest agreement announced Wednesday would mean cities and counties would lose $1.3 billion in each of the next two years, but they would begin receiving the lost revenue beginning in 2006-07.
For cities specifically, $700 million would be taken from their collective coffers over the next two years.
In exchange, Schwarzenegger is pledging his support two years from now, when a measure restricting such state level takeaways goes before voters.
“From a fiscal point of view, we come out a little bit the loser, but we’re not too bad off,” Baksa said. “If (the measure) passes, then come November, cities will be looking at a much brighter future.”
The League of California Cities has agreed to support the governor’s plan. However, the group’s support is contingent upon how the $700 million takeaway is divvied up.
Megan Taylor, spokeswoman for the League, said the takeaways must be spread amongst cities’ revenue streams, such as property tax, sales tax and vehicle license fees. Taylor said the League is insisting on the three-way division because some cities rely on one revenue stream more than another.
“That’s our attempt at sort of equalizing the hit,” Taylor said.
The local budget
Although population for the City of Gilroy continues to grow, the latest local budget model calls for no new full-time positions, from administration to the police and fire departments.
Baksa likens this no-growth policy to a slow death and says Gilroy residents won’t feel the pain “until it is too late.”
He uses the example of police protection to drill home his point. Baksa says people who call for police this year will see an officer at their door in three minutes or less. With more citizens and the same number of police next year, the cop will show up in three minutes and 10 seconds, the following year in three minutes and 20 seconds.
“Something’s got to change or we certainly will die a death by 1,000 cuts in the long run,” Baksa said.
Baksa spent four hours Monday with City Council in a budget study session. The 30-year veteran city manager also spelled out things Gilroy may have to consider if it wants balanced books in future fiscal years, including charging for 9-1-1 emergency calls.
Baksa called his estimates “very rough,” but told Council the city could take in somewhere between $600,000 and $800,000 in revenue if it charges a nominal fee for 9-1-1 calls.
“I’d rather not see it happen,” Mayor Al Pinheiro said. “But we should take a look into it, and at some point in time if we find we need to fill in some gaps, then we can entertain the idea.”
If Gilroy’s city attorney rules that the 9-1-1 fee is a tax, the matter would need voter approval. However, Baksa said most cities considering the 9-1-1 charge have determined it is a mere cost-covering fee.
In this instance, voter approval is not necessary; only a vote of the City Council would establish the charge.
Looming budget cuts
As things stand now, the city will hold off on making Draconian cuts such as closing the Sunrise Fire Station, the Gilroy Museum and senior and youth centers, as well as laying off nearly 30 full-time employees.
However, Baksa has a four-tier plan to make many such reductions if larger-than-normal state takeaways continue and the modest turnaround of the economy doesn’t.
Cuts made in the first tier would be of a nature that would be easy to replace once budget woes subside. Cuts made in the later tiers would include stripping down the city’s core services.
In the meantime, city leaders are drumming up ways to cut costs. One plan is to end its operation of the Gilroy municipal golf course off Hecker Pass, a long-time money loser for the city.
In a scenario explained by Baksa Monday, the city essentially would remain as owner of the golf course but would relinquish control of daily operations.
The city could charge an independent operator a yearly fee to manage and maintain the entire facility. The independent operator would keep whatever profits he or she could make, over and above the city fee.
Besides cutting some services, the city also will have to charge more for others, including water delivery.
Due to increased water pumping taxes by the Santa Clara Valley Water District, the city will have to raise rates by 15 percent. Increases of 5 percent and 10 percent will continue over the next few years.
Eric Leins covers city politics for The Dispatch.
