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June 18, 2021

Council approves two-year budget

Federal funds allow city to recover sooner than expected

The Gilroy City Council approved a budget June 7 that will restore some positions cut during the early days of the pandemic while allocating more money for streets and other infrastructure, as well as for rising pension costs, over the next two years.

The budget is bolstered by an estimated $10.9 million the city expects to receive from the American Rescue Plan Act, which President Joe Biden signed into law on March 11. 

Such funding is critical to the city’s economic recovery, and Finance Director Harjot Sangha said Gilroy expects to return to pre-Covid levels financially by mid-2023.

“The ARPA funding provides a bridge and stabilizes the budget,” he said.

The budget includes spending $174.3 million and $155.6 million during the 2022 and 2023 fiscal years, respectively. 

The council approved the budget plan unanimously. But an amendment by Councilmember Zach Hilton to “pre-approve” spending possible surplus funds at the end of the year toward specific projects did not garner support of the council majority.

Hilton proposed using surplus money, if the city has any at the end of the next two fiscal years, toward a capital improvement project sought after by one of Gilroy’s commissions. He suggested money go toward the Parks and Recreation Commission and Bicycle Pedestrian Commission’s plan to add trail wayfinding signage to Christmas Hill Park, for which they had requested funding.

“If there’s a surplus in funds, not the General Fund, that money can go to a project that benefits the community,” he said.

Hilton’s amendment failed, as only he and Councilmember Rebeca Armendariz voted in favor.

Councilmembers rejecting the proposal said they were concerned about committing money to a project so far in advance, and questioned whether Gilroy’s needs would change over the next two years.

“I don’t think that we have a lot of economic certainty as we come out of the Covid crisis,” Councilmember Peter Leroe-Muñoz said. “If there is a surplus at the end of the year, we should take stock of it at that time. I just don’t like tying our hands this early.”

City Administrator Jimmy Forbis said the council should come up with a policy about how it wants to spend surplus money at the end of each fiscal year.

“It may behoove the council to really sit down and think about how you want to handle the money that you have left over every year, because you almost always do,” he said. “We all want to provide services, and the extra money in the bank above our reserve level is not really benefiting us too much.”

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