When local organizations come to City Hall asking for money next
month, the Gilroy City Council will have to decide whether to tap
into its touted reserve to send them home happy.
When local organizations come to City Hall asking for money next month, the Gilroy City Council will have to decide whether to tap into its touted reserve to send them home happy.
Currently, Gilroy sits on a reported $21.4 million surplus, one-time savings city representatives have championed for several months, according to City Administrator Tom Haglund.
Recently, however, officials said they might be willing to part with some of that money to revamp funding to organizations like the Gilroy Economic Development Corporation, Gilroy Visitors Bureau and Downtown Business Association.
“We’re certainly trying to do what we can to fund those organizations,” Haglund said. “But just how much right now is just too early to tell.”
The City Council will hold budget study sessions at 6 p.m. on May 9 and 11 in the Council chambers at City Hall. The city approves a new budget every two fiscal years, and its current budget will end June 30.
In all, the three organizations are requesting up to a combined $288,000 over the next two years from the city.
Mayor Al Pinheiro, who said Gilroy “hasn’t been one to spend money frivolously” and could be considered the financial envy of other cities, would be willing to dig a little deeper to assist local agencies.
Before those agencies receive a boost from the city, however, Pinheiro said two questions would have to be answered: What would they do with the money, and what would the city get in return?
“Obviously there’s an expectation of getting a return on investment,” Pinheiro said.
The city could keep a tight grip on its extra cash if organizations can’t show what those returns might be, Haglund said.
“You’re receiving (the money) to do something. There should be performance measures. There should be some goals and objectives,” he said. “Any organization that receives taxpayer funding should be able to provide its goals and objectives.”
Eric Howard, president of the Downtown Business Association, said his organization has already shown what it can do.
Over the past year, the organization accomplished, among other things, two successful Wine Strolls and a holiday parade, and donated $3,500 to the Gilroy Demonstration Garden, he said.
The DBA also gave $25,000 to the city to purchase new bronze statues and $24,000 to obtain wayfinding signs, according to Eric Howard.
“I think it’s slam dunk with the Council because we have been so effective,” Eric Howard said.
The city’s Downtown Business Association is set to ask for money, including $40,000 to hire a part-time executive director for the next two years.
Howard has said the position is vital, as downtown no longer can rely on individual store owners to plan and run events while trying operate their businesses. The DBA finished its most recent year with roughly $25,000 available in unrestricted funds, Howard said.
Last month, the City Council approved a $25,000 budget amendment to install a speaker system downtown, which Eric Howard said would be used for different downtown events should be in place by the city’s next Downtown Wine Stroll on May 14.
The 10th annual Garlic City Fun Run is scheduled for June 25, and plans are also in the mix for a farmers market slated for June 5.
Funding talks between the city and local groups have been stirring for months.
In February, city officials and EDC representatives gathered for a joint meeting, in which the EDC asked the city to fund as much as 80 percent of the organization’s $200,000-plus budget.
The city’s contributions to the EDC fell from $120,000 to $96,000 in 2007, according to the EDC, which also reported that contributions from private businesses dried up during the tough economic times. The EDC also announced in February that contributions from partner organizations had fallen more than 50 percent.
During the February co-op meeting, the EDC said the city could do nothing, restore funding levels to $120,000 or increase its contributions to as much as $180,000. Without increased city funding, the EDC would likely have to continue to cut staff and programs in the coming years.
Councilman Perry Woodward said in February the city’s reserve fund was too large. As a public entity, the city should consider spending some of its surplus on organizations and projects that could bring value to the community, he said.
“We’re probably sitting on more cash than a city should,” Woodward said Friday. “I’m not opposed to a strategic plan that would spend the reserves in certain ways.”
“I do think that the EDC has been underfunded,” he said.
Jane Howard, executive director of the Gilroy Visitors Bureau since 2005, said the city has reason to return funding levels to those of several years ago.
More funding could help the bureau attract more visitors to the city, she said, allowing Gilroy to grow sharper in three areas that make cities more successful: revenue, taxes and jobs.
Bringing more people to Gilroy would mean more taxes from shoppers and travelers buying gasoline. The city has seen a slight increase in hotel occupancy taxes recently, meaning more visitors are finding reasons to stay overnight in Gilroy, Jane Howard said.
“When you lose some momentum, it takes some work to get that going again,” she said. “It’s a big job and you’ve really got to keep working at it.”
Two years ago, the city cut the visitors bureau yearly funding from $200,000 to $160,000, causing the bureau to truncate its business hours and end Saturday operations, Jane Howard said.
She also said she was notified last month the Morgan Hill Chamber of Commerce and Visitor Center would no longer offer its $50,000 for a cooperative regional marketing plan because the money comes from Morgan Hill’s redevelopment agency, which, along with other RDAs in California, could be cut entirely from Gov. Jerry Brown’s proposed budget.
Howard called the news “very, very disappointing,” but said the Morgan Hill and Gilroy visitors centers would still maintain a partnership, possibly co-operating for trade shows.
“I think all of us are doing our best,” Howard said.
Councilman Woodward said he wasn’t aware of a proposal from the visitors bureau, but said he looked forward to hearing Howard’s request.
“If she thinks it’s a good investment, I’m going to be all ears,” Woodward said.
