City leaders explore ways to fill coffers
Morgan Hill – Looking to fill a projected budget deficit that could reach nearly $1.5 million, the Morgan Hill City Council looked into ways to generate more revenue during a workshop Friday.
The day-long meeting was aimed at exploring results from public surveys conducted along with plans to generate more money and look at “strategic” budget issues, which include potentially cutting fire and emergency response services by reducing the amount of money the city pays Santa Clara County for providing fire protection and emergency response services.
The strategic budget considerations could also include cutting Morgan Hill’s police force by reducing the number of officers or contracting out police protection to another entity, much like Cupertino and Saratoga do by having the Santa Clara County Sheriff’s Office police their cities. The city’s fire protection is already contracted out with the Santa Clara County Fire Department handling calls in Morgan Hill.
City officials are also considering reducing funding for after-school recreation programs and recreation and cultural programs for adults and seniors and funding for the Aquatics Center and the Indoor Recreation Center.
Council members looked into eight possible revenue sources, all of which were either a tax or a fee.
With the exception of a possible 911 emergency call center fee, the tax increases all would have to be approved by voters – a proposition that had a couple of the council members concerned.
Results from seven community conversations and a phone poll showed that residents would either reject or barely pass the tax measures if brought to a vote.
“I don’t think they (residents )will be moved until we do something drastic,” said Councilman Mark Grzan. “They will continue to be disenchanted.”
The possible tax measures include raising the sales tax as much as three-quarters of a percent, adding a utility tax and a property transfer tax. Each measure could raise between $400,000 to $4.2 million, if passed by voters.
Grzan said that unless the city began to eliminate services, such as the library, residents may not be swayed to support new taxes.
Councilman Greg Sellers agreed with Grzan, but was wary of taking such drastic steps to get the public’s attention.
“Yes it would be a great way to show the community, but they would be draconian and far beyond what we want to be doing in the community,” Sellers said.
Forecasts by the city show that the deficit is leveling off from earlier predictions; however, the city expects to be operating in the red through at least 2011.
City Manager Ed Tewes said that while most sources of revenue are leveling off or decreasing, the sales tax and property taxes have “exceeded our expectations” with sales from gasoline and autos higher than expected.
Tewes was also quick to point out that the forecasts by the city were often wrong.
Council members were presented results of the community conversations held since January along with results from a poll taken which asked residents if they would support new taxes.
The community conversations were held by the council to gauge how residents feel about possible new revenue sources to eliminate a $1.3 million projected budget shortfall.
Following the conversations, some residents said they felt like the council was not giving them enough options to consider.
No one from the public initially had shown up for the Friday morning meeting.
Some of the council members expressed concerns about who attended the meetings, mainly that they were those who were already active in the community and didn’t give a representation of the city.
“It wasn’t in any way a make up of our community and doesn’t represent 90 percent of our community,” said Councilman Larry Carr.
The survey asked similar types of questions, but didn’t ask people to rank options based on preference.
In the survey, conducted the first week of May, the majority of 400 people thought favorably of the city and the direction the city is headed. The survey also found that support for a potential tax increase has dropped from last year.
In a poll conducted in 2005, 60 percent said they were in favor of a tax increase. That number dropped to 44 percent this year. When given additional information on the tax increases, such as where the money may go, 50 percent said they were in favor.
According to the survey results, Morgan Hill residents wanted to see more retail stores come to the city, but didn’t want the big-box stores that are appearing in Gilroy.
Some residents supported having more auto dealerships, but they raised concerns about the potential number and location of the car lots.
Grzan said the council needs to reach out more to the community to educate it about the need for either a new revenue source or potential cuts to services.
The potential new revenue could also play a role to rework the structure of fire services.
Two representatives from Citygate Associates gave the council their recommendation to change the current layout of the fire services for the area, including Morgan Hill and San Martin.
The presentation laid out potential costs and benefits of consolidating fire departments in Morgan Hill and South County, adding a new fire station – which is in the master plan adopted in 2001 – or redeploy the units and create a contract for coverage with Gilroy.
By reworking the services, the council hopes to offer better coverage for Morgan Hill and San Martin and to better staff the stations.
Council members agreed that changes need to be made, but there was debate about a possible time table to potentially send a revenue measure to the voters.
Sellers said he wanted to take a couple of years to look into the possibilities, including a possible location for a third fire station in Morgan Hill.
“We have to address our vulnerabilities, and we don’t have a fully developed plan,” Sellers said.
Cheeto Barrera is an intern for the
Morgan Hill Times. He can be reached at cb******@*************es.com.
