A city union has taken aim at the city’s budget priorities after
a staff report proposed spending $235,000 on city directional
signs.
A city union has taken aim at the city’s budget priorities after a staff report proposed spending $235,000 on city directional signs.
Gary Muraoka, president of the Gilroy chapter of the American Federation of State, County and Municipal Employees, took aim at the city for the potential expenditure in a letter he sent to the mayor and city councilmembers Thursday.
“The City Council needs to be responsible with our General Fund and not waste it on pet projects and tokens,” Muraoka wrote.
The letter came in response to a city mid-year budget review that was discussed at Monday’s council meeting. That report by City Finance Director Christina Turner noted that the city was able to increase its general fund reserve by about $900,000 in fiscal year 2009 – which ran from July 1, 2008, to June 30, 2009 – by aggressively cutting costs.
The report also outlines about $350,000 in expenditures for the council’s consideration. That includes $300,000 worth of recommendations from the Gilroy Economic Development Coalition – a group that consists of the Gilroy Economic Development Corporation, Gilroy Visitors Bureau and Gilroy Chamber of Commerce. Those recommendations included $235,000 for “wayfinding” signs, $45,000 for a city marketing plan and $20,000 to apply for local enterprise zone status, which would provide tax incentives and other economic benefits for local businesses.
Meanwhile, city staff recommended $55,997 worth of expenditures, including a new $10,000 system to record meetings in the council chambers, $24,997 for the Santa Clara Valley Habitat Conservation Plan and $4,000 for an employee recognition program.
The city’s employee annual recognition program – which included a $10,531 barbecue and $15,648 in awards was nixed in 2008 by council members based on recommendations from city department heads.
The city also plans to spend $17,000 to correct an error by the county in assessed valuation of three parcels at the Gilroy Sports Park.
In his letter to the council, Muraoka urged the city to remain thrifty as it struggles with sales and property tax revenues.
“We’re not out of the woods yet,” Muraoka said Friday.
He thus urged the council to hold off at least a year or two before spending money on directional signs for Gilroy.
“AFSCME Employees are not sacrificing one million dollars in lost salary so the City can build pretty signs while keeping City Hall closed to the public every Friday,” Muraoka wrote.
Currently, City Hall is closed two Fridays each month because employees have taken furlough days as part of salary concessions. City Hall is closed to the public on non-furlough Fridays so employees can catch up on work – a separately passed city measure not necessarily linked to furloughs.
On the other hand, Richard Spitler, CEO of the Gilroy EDC, urged the city to be aggressive in terms of economic development so it can take advantage of the eventual uptick in the economy.
“We see (the signs) as an investment in the economy that benefits the people that live and work here (and) that also ultimately benefits the city coffers as well,” Spitler said.
The entire wayfinding project will cost about $450,000, but business leaders are asking for $235,000 because of current economic challenges, he said.
Representatives from both of the city’s public safety unions did not want to comment on budget priorities last week as they are both in salary negotiations with city officials.
Yet, both Gilroy Police Officers Association President Mitch Madruga and Jim Buessing, secretary and treasurer of International Association of Firefighters Local 2805, had questions about a proposed general fund reserve policy that the council planned to discuss Monday.
A city staff report recommended the council retain a general fund reserve of 25 percent – about $8.5 million. Staff also requested the council set up a separate “economic stability reserve” that would be 15 percent of general fund expenditures – about $5.1 million. The economic stability reserves only would be available during a severe economic downturn to ensure the city can maintain operations.
The city’s current policy keeps reserves at 15 to 25 percent of total annual expenses, which are about $34 million. However, the reserve is projected to be about 55.4 percent for fiscal year 2010, or about $18.9 million, as of June 30, Turner said.
Buessing said he would like to learn more about when the general fund reserve can be used.
“We’re at 50 percent right now,” he said. “What are they there for?”
Madruga said the reserve proposal was a bit “overkill” as the industry standard is reserves of 5 to 10 percent.
“If you were to call around in any other city in California and ask what percent of reserves are for general funds, none are going to even come close to 50 percent,” Madruga said. “These cities would be ecstatic to have even half of that.”
Mayor Al Pinheiro stressed Monday morning that everyone has suffered during these economic times, and the city needs to look for ways to stimulate income for the city. Muraoka is looking out for the good of his union and does not share the same goals as the City Council, Pinheiro said.
“We must provide the citizens in general with a good quality of life in our community,” Pinheiro said.
Although he said his spending priorities would be determined by what came out of the council’s discussion Monday evening – which occurred past Dispatch deadline – he said several cities have used wayfinding signs in the past.
The city’s general reserve “might be a little heavy,” Pinheiro said, but it would not seem so large if the economy dipped further, he said. He likened the reserve to a savings account. It can be used for special projects, such as sidewalks and marketing strategies, and should not be used exclusively on payroll.
“We’re not going to be pressured by anybody to tell us when, where or how to use that (reserve) money,” he said.
