Hollister seeking to close $4 million budget deficit

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Amid a forecasted $4 million deficit for the next fiscal year, Hollister city officials are exploring ways of reducing expenses. 

The cost-cutting strategies discussed at the June 2 Hollister City Council included renegotiating wages and benefits, reevaluating various contracts and ending sponsorship of various events. 

However, city officials kept their plan for the iconic Hollister Independence Rally intact, prompting city employee representatives to ask why the council was moving forward with the biker rally while considering employee pay cuts.

Mayor Roxanne Stephens and councilmembers Rolan Resendiz and Rudy Picha said the rally is an opportunity to increase economic development and that the majority of the cost would be covered through sponsorships. 

No details were provided regarding how much sponsorship funding has been secured, but City Manager David Mirrione estimated that the city will pay $150,000 toward the rally costs. The overall cost is estimated to be $500,000.

Hollister Peace Officers Association President Bryce Morgan and other employees questioned the economic benefit of the biker rally.

“We keep hearing it’ll bring in millions, but that doesn’t match the math,” Officer Bryce Morgan said. “With our sales tax rate, you need millions in local spending, and that’s not realistic.”

At the meeting, several city employees aired concerns about potential wage reductions and layoffs, saying that reducing staff will reduce services the city provides. 

The Hollister council directed staff to pursue these cost-cutting measures:

• Allow only required training and conference for staff and City Council
• Reevaluate the animal control agreement and joint use agreement with Hollister School District for parks
• Cancel the Fourth of July Fireworks Show at Veterans Memorial Park

The city will also analyze cutting wages and benefits for council members.

Mirrione said the city originally planned for a certain level of spending, but that figure has since increased with the discovery of several expenses from previous years which had not been registered by the city.

The reason for the deficit, he said, is that revenues are not keeping up with increased costs. He said sales tax revenue is projected to remain flat and that the city has outdated user fees and rates, meaning it doesn’t charge enough to cover the costs of the services it provides. 

In terms of expenses, Mirrione said insurance premiums will increase by $890,000 next fiscal year. In addition, he said, the city is on the hook for an additional $4 million to cover its unfunded accrued liability with the California Public Employee Retirement System. He said that obligation is expected to increase every year and reach the $5 million mark in three years.

Mirrione said the budget forecast already includes about $6 million in general fund savings that would result from eliminating the majority of open positions.

Hollister Police Officer Chris Wells said the city is losing staff because workers don’t know if they’ll have a job tomorrow.

“Our department has cut and cut and cut; we’re bleeding,” Wells said. “We can’t cut any more.”

City Councilmember Dolores Morales said she wanted to explore all options before cutting positions, including eliminating the City Council’s wages and benefits.

“I know it’s a drop in the bucket,” she said. “That might save one or two people.”

Mirrione said the council’s combined wage and benefits are $170,000 annually.

Mayor Roxanne Stephens said she supported that action but was concerned it could discourage a part of the community from running for office in the future.

“Otherwise, only those that are financially able to sit in these positions will take them on,” she said.

The council did not discuss ways to increase revenue, but Mirrione said options include improving various districts, including tourism and business, updating service fees and rates, renegotiating leases and selling the property it owns at 190 Maple Street.

The Hollister Peace Officers Association and Service Employees International Union Local 521 recently wrote commentaries for BenitoLink which questioned the city’s handling of Measure W revenue and its accounting in light of what SEIU called a “financial crisis.”

The 2016 Measure W was a sales tax extension for 20 years approved by voters to fund primarily public safety and essential city services.

Hollister is among many jurisdictions in the state dealing with deficits, including San Benito County. The City Council has scheduled its first budget hearing for June 9.

Uncivil moments

In his seven years on the council dais, Resendiz has not minced words when it comes to his stance on slowing residential growth.

With a packed chamber at the June 2 meeting, he took a different approach when responding to former council member Rick Perez’s comments criticizing his and Stephens’ approach to the fire service contracts with San Benito County and San Juan Bautista.

Resendiz lifted to his chest a paper on which he had written “JCAT”—a slang term meaning “crazy or foolish person,” according to the Prison Journalism Program, which trains and publishes articles by incarcerated writers. According to the nonprofit, the “J” refers to the classification of mental illness, back when California used letters to label incarcerated people.

Perez said he deserved an apology for Resendiz’s action.

Stephens directed Resendiz to stop and gave Perez additional time to finish his comment.

“This is exactly my point,” Perez said. “This is our leadership.”

Ninety minutes later, Resendiz was speaking about the City Council’s commitment to address the deficit when he said to a member of the public, “You can say whatever you like to me. That’s rude. Very rude. And you can continue to flip me off as well. That’s fine but it’s very rude.”

Stephens asked him to stop and called a point of order as a member of the public responded to Resendiz. 

Hollister Police Chief Carlos Reynoso, who acts as the sergeant at arms for council meetings, told BenitoLink the person Resendiz accused did not do what she was accused of doing.

Stephens told BenitoLink she did not witness anybody making such a gesture toward Resendiz nor did she see the sign that he displayed. She said she wishes that such behaviour would not be highlighted because it may encourage similar behavior in the future.

“I’ll continue to do everything I can to conduct business in a way that’s professional and respectful to each other,” she said. 

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