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Gilroy
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February 1, 2023

Don’t merely react, take budget action

City leaders are pinning their hopes for Gilroy’s fiscal future
on reserve funds and political promises, and that’s got us
worried.
Officials are proposing to use rainy day funds, not further
budget cuts, to close a $2.9 million budget gap for fiscal year
2004-05.
City leaders are pinning their hopes for Gilroy’s fiscal future on reserve funds and political promises, and that’s got us worried.

Officials are proposing to use rainy day funds, not further budget cuts, to close a $2.9 million budget gap for fiscal year 2004-05. The city’s reserve funds are projected to be depleted in five short years; nevertheless, city officials are taking a wait-and-see approach before implementing additional budget cuts.

Even more worrisome is the striking difference between what the city is saying – “there is a hiring freeze on” and what it’s doing – actively seeking a new community services director and a new fire chief.

The community services director position, for example, is being recruited by Paul Kimura and Kimberly Warner of Avery Associates in Los Gatos. No doubt that costs a pretty penny. And the salary range is $112,860 to $143,832 plus “an attractive benefit package.”

What about consolidating that position or holding it open for a year?

The state’s severe, chronic budget problems also mean the city is relying on an extremely dubious proposal by Gov. Arnold Schwarzenegger. Under the governor’s plan, local governments – cities, counties, redevelopment agencies and special districts – will agree to absorb a staggering $1.3 billion in cuts from the state in each of the next two years. What do they get in return? Schwarzenegger’s pledge to support a measure to eliminate such state money grabs in the future.

The proposal is conditionally supported by the League of California Cities which is insisting that the cuts to local governments are divided evenly among revenue streams such as property tax, sales tax and vehicle license fees.

Two years is a long time to wait and $2.6 billion is a lot of money – especially when it’s money that belongs to local governments anyway.

In the meantime, city officials are looking at implementing new fees (or taxes, and that seemingly minor difference in semantics makes a big difference in how difficult it is for the fee/tax to be imposed) such as a fee for 9-1-1 calls. If imposed on Gilroyans’ local phone bills, a 9-1-1 service fee would raise between $600,000 and $800,000.

City leaders should be skeptical of the governor’s promises and take a more aggressive approach to reducing city spending – now. With firefighter negotiations approaching – and the real possibility of binding arbitration looming – city leaders need to take a hard-nosed approach to the budget now to prevent even more severe pain in the future.

Core services – public safety, road maintenance, sewer, water and recreation – need to be protected. Everything else should be considered fair game, including the aforementioned high-level administration positions.

Subsidized operations – like the Gilroy Golf Course – need to be re-examined and restructured.

City leaders ought to be having serious discussions with all of its unions. The budget situation is dire and unions ought to have realistic expectations – including the possibility of no pay increases.

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