Russ Valiquette supports new budget, despite reservations about
the budgeting process
Gilroy – Rubbing his head and huffing, Councilman Russ Valiquette decided this week that he wasn’t going to be the one to kill the city’s $119 million budget. But that doesn’t mean he had to like it.
The absence of one colleague and the moral stand of two others during a Monday city council vote on the budget, which takes effect July 1, forced Valiquette into the uneasy position of supporting what he calls “deficit spending.”
In the new fiscal year starting July, the City of Gilroy plans to add seven new employees and hire people for seven positions left vacant as part of financial belt-tightening in the last three years. In addition, the city proposes 18 additional new hires in the following five years.
The problem with the five-year budget, according to Valiquette, is that the city plans to finance most of the new hires and other spending by dipping into its $23 million reserve fund, without waiting to see if a better-than-expected budget climate will last into the future.
“In my opinion, the only time we should dip into reserves is for an emergency or special projects,” Valiquette said. “I don’t think we should be using our reserve to supplement our income in advance.”
That opinion is shared by Councilmen Dion Bracco and Craig Gartman, who opposed the budget in a 4-2-1 vote. Councilmen Peter Arellano and Paul Correa joined Mayor Al Pinheiro in supporting the measure, while Councilman Roland Velasco was unable to make the meeting. Velasco, a policy aide to District 1 Supervisor Don Gage, was in San Jose working on the county budget process.
Bracco said the city could have delayed adding four new firefighters at the Sunrise Station in northwest Gilroy. The additions approved for the coming fiscal year will transform the station from a medical response outpost to a fully staffed firefighting team.
The vast majority of Gilroy’s emergency calls involve medical response, Bracco pointed out, adding that the city plans to reduce the likelihood of major fires by requiring sprinklers in new homes.
“Do we really need a fully staffed engine over there?” Bracco asked. “You can’t unhire these people. You can’t just try them out for a year and then send them home.”
Baksa said the reserve picture appears bad in the coming fiscal year because of the need to use surplus monies to replace more than $3 million in lost fees as part of the economic incentive program. Under the terms of the program, the city waives up-front development fees for new businesses in exchange for the promise of future sales tax revenues or jobs. Those payments using the reserve fund will drop by more than $1 million in fiscal year 2008, while sales tax revenues begin flowing back to city coffers from business generated by the program, according to Baksa.
“Even though four or five new positions does have an impact, it is relatively minor compared to the economic incentive paybacks,” Baksa said, referring to the sales tax returns. “I would have never recommended anything to council if I thought we were going to get in trouble.”
Such assurances convinced Valiquette to support the budget on Monday, despite his reservations about the budgeting process. Along with Bracco and Gartman, Valiquette is calling for city council to take a hands-on approach to spending priorities earlier in the budget process. They are also calling for an official policy that would prevent city reserves from dipping below certain levels, except in the case of emergencies. In the meantime, Valiquette said he wasn’t prepared to spike the city’s budget by forcing a tie vote.
“I don’t want to end up like Sacramento where we say we’re going to operate without a budget,” Valiquette said. “We need a budget, whether it’s a good one or bad one.”
