Even as the city drowns in debt, the construction of a community
aquatics center and gymnasium is moving along swimmingly at the
corner of Day Road and Santa Teresa Boulevard.
Even as the city drowns in debt, the construction of a community aquatics center and gymnasium is moving along swimmingly at the corner of Day Road and Santa Teresa Boulevard.
The city and school district are building the gym and aquatics center, a $16 million endeavor, at Christopher High School as a joint venture with the help of a $2 million incentive from the state, which the school district has already received, according to Enrique Palacios, the district’s deputy superintendent of business servicesaccording.
As for the city’s share? Well, when the housing market took a dive off the deep end, the city’s portion evaporated because developers stopped paying into the public facilities fund where officials had budgeted that expense. Given all the other commitments and overall lack of cash, the account will plunge to an estimated $2.8 million deficit by this summer, according to City Administrator Tom Haglund.
“It’s hard to write a check for $4.3 million when the (public facilities) fund is minus $2.8 million,” Haglund said. “I have indicated to the school district that the city can’t write that check. We will deal with this by working with the council and with the school district through the budgetary process.”
Before voters passed Measure P – a $150 million school facilities bond – last November, the school district was in a similarly tight spot with scant developer fee collections and properties that wouldn’t sell. The district considered putting projects on hold to stay afloat. But with a facilities fund now awash in Measure P money, the district was able to move forward on the school’s construction and plans to open the school, including the gym and aquatics center, in August.
“We made a commitment to voters that this is what we’re going to build and we’re building it – that’s not in question,” Palacios said. “We understand that the city is having financial problems just like we’re facing, but at the end of the day, we are working together to find a solution.”
A snapshot of the city’s finances paints a bleak picture. The $2.8 million deficit Haglund mentioned is part of an overall $10.5 million shortfall in all the city’s developer-linked funds, but that does not include this year’s $2.3 million general fund deficit. Unless the city does not permanently cancel or delay tens of millions of dollars worth of major capital and infrastructure projects, the general fund reserve will have to cover all of this debt. The fund held $22 million in July, but Haglund said staff expects that to drop to $5.5 million by summer and possibly down to negative $11.5 a year later – all thanks to a standstill in development that officials never counted on when planning on these projects.
“There’s been nearly a full stop in development in the community,” Haglund said.
Mayor Al Pinheiro recently pointed the finger at the city’s practice of leveraging its development-based funds against the reserve account to make financial commitments such as its $6.6 million promise to the district over the next two years.
But the projects are already underway at CHS and won’t be halted for lack of funds on the city’s part.
“We will have to structure some form of agreement to pay that amount of money over time,” Haglund said, pointing out that even though the school district has added a newfound revenue stream – Measure P – to its portfolio, it still has to adhere to a strict budget. He said the city is beginning its budget process in earnest in an effort to devise an alternative payment plan with the school district.
“Unfortunately, we’ve had an intervener – the economy,” Haglund said. “The economy is not contributing in the same way that it was before and now we have a real budget problem. But everybody wants to be able to provide this to the community,” he said of the gym and aquatics center. “It will be a tremendous asset. This is a big project for everybody.”
So what does the community gain?
For starters, a brand new water slide, a competition pool, a 6,010 square foot teaching and play pool and a 8,538 square foot gym. Offices, changing rooms, a first aid room, restrooms and a snack bar will round out the facilities. There will also be a track, but not the permanent, artificially landscaped running loop that Palacios said will go in during a later phase. He could not predict how much that would cost, but he said the new high school will include a temporary track.
The community will have access to all the amenities most nights and weekends and during school breaks, according to the city and school district’s joint use agreement. The district will operate and maintain the gym and aquatics center with the city paying for utilities and maintenance for the aquatics center and staffing for city programs at both facilities, according to the agreement.
“This project is a great addition to the city,” Palacios said. “It enhances the quality of life in Gilroy and creates a partnership between the city and school district, which many communities are trying to do especially in times of fiscal constraints.”
“If the school district has capital dollars for facilities that can double up as community facilities, let’s do that and maximize the value of our tax dollars,” he said.
Chris Bone contributed to this report
