Layoffs, wage cuts and a few accounting tricks will likely
deliver Gilroy’s budget into the black this fiscal year, but some
union representatives are questioning the timing of the city’s
latest budget maneuver.
Layoffs, wage cuts and a few accounting tricks will likely deliver Gilroy’s budget into the black this fiscal year, but some union representatives are questioning the timing of the city’s latest budget maneuver.
Union agreements last summer imposed furloughs and cut wages to knock $3.1 million off Gilroy’s $4.7 million deficit this fiscal year. Then, city finance officials erased the remaining $1.6 million shortfall 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.
The economy could still tip the fragile balance, and rather than cheer the news, some union representatives said the city should have made the cuts before grueling negotiations began last summer.
“Why wasn’t this done first, before the layoffs and concessions, which put employees in a bad light to the public,” Gilroy Police Officers Association President Mitch Madruga said. “Apparently everything wasn’t done back then to cut the fat I’ve mentioned in the past.”
City Administrator Tom Haglund equated the reallocation of funds to a family downgrading from a three- to a two-car household and said it was unfair to say the city was sitting on money that could have saved jobs. The $1.6 million alone could not have solved the city’s financial woes, Haglund said. In addition, the $1.6 million could not have been cut without the layoffs, he said.
“When you reduce your workforce by 71 full-time employees (48 layoffs and 23 frozen positions), you’re no longer going to replace equipment for them,” Haglund said. “We won’t be able to replace employees for a number of years, and we realized we were probably collecting too much money in our replacement funds, so we can spend some of that.”
City Finance Director Christina Turner stressed the latest cuts came predominantly from fleet and equipment surpluses, which Mayor Al Pinheiro pointed to as proof the city is cutting the “fat” Madruga and other unions have eyed. Unions have often unsuccessfully pointed to the city’s $17.9 million general fund reserve as a way to avoid layoffs and wage cuts.
“Police are always talking about using the reserve fund, but we did use reserves. We just did,” Pinheiro said. Council member Cat Tucker added that the council directed Haglund “to continuously improve the budget” during numerous budget discussions this year. Total city expenses now total $32.7 – a $12.5 million decrease compared to 2007.
Fire Local 2805 Representative Jim Buessing agreed that fewer employees driving and using less city supplies allowed for the draw down of reserve funds and that his union knew this was part of the city’s game plan all along.
However, Madruga and Tina Acree – business agent for the local chapter of the American Federation of State, County and Municipal Employees – said Thursday they had not heard about the balanced budget and questioned the timing and feasibility of the cuts.
“This is another Band-Aid. It’s going to save people going forward, but what are we going to do next year,” Acree said. “Fewer employees are already causing a slower process and not having the proper equipment and tools will take away from efficiency.”
Pinheiro agreed the council will have to find more money next year if the economy does not improve as this year employees will be “gobbling up” the fleet and equipment reserves.
While city departments have “moth-balled” unused cars and computers, Turner said every department will maintain their current assets because the fleet and equipment funds are still receiving yearly allocations from the general fund.
To close the gap, the city will use $1.4 million from its fleet replacement and equipment funds, which together held $1.8 million. The city will save the remaining $200,000 by delaying for at least a year reimbursements to developers who were promised incentives to build. Turner could not immediately say which developers might receive delay notices.
“Cities have the discretion as to how they will repay developers, and Gilroy is going to elect to temporarily hold off,” she said. “It appears we’re on our way to having a balanced budget.”
