The news that Gov. Arnold Schwarzenegger would invoke emergency
powers in order to pay the cities and counties at least part of the
Vehicle License Fees they need to pay critical services was
welcomed in Morgan Hill Thursday.
The news that Gov. Arnold Schwarzenegger would invoke emergency powers in order to pay the cities and counties at least part of the Vehicle License Fees they need to pay critical services was welcomed in Morgan Hill Thursday.
Morgan Hill this fiscal year would have lost $1.4 million, or 12.5 percent of its general fund, which pays for police, fire, recreation and government administration.
“This is very good news,” said City Manager Ed Tewes. “It indicates the governor’s willingness to take action to back up his promises.”
Schwarzenegger said before the election that he would repeal the VLF increases and honor the backfill pledge. He has not identified exactly where the money would come from but sources say it could be from higher than expected tax revenues and from cuts to other areas including transportation, health services and higher education.
“We are all concerned that he (the governor) has big challenges ahead,” Tewes said. “Some legislators have challenged him to identify the specific sources – but, most importantly, he has followed up commitment with action to protect local public safety services.”
Tewes said, as far as he can tell, it is not yet certain that the governor has the authority to invoke these powers covering the December 2003-June 2004 payments without Legislature approval.
City Attorney Helene Leichter said she believed the governor had changed his mind on the backfill because of the threats of lawsuit from the counties.
The city of Los Angeles has announced its intention to sue the state for the fees, as has the League of California Cities, of which Morgan Hill and Gilroy are members.
Leichter said the council has not yet discussed suing over the VLF.
“Once the League works out the pleadings they will ask if other cities and counties want to join,” Leichter said Thursday. “The council would discuss it then.”
The Gilroy City Council this week authorized its attorney to look into joining the lawsuit. Some 9 percent of Gilroy’s general fund comes from the VLF.
Santa Clara County would lose $70 million this year if the VLF were not backfilled. Even with the backfill, the county is expecting to find itself $90 million short for next year.
The county is also part of the League of California Cities lawsuit over the backfill.
“We are getting hammered and have to act fast to stop the hemorrhaging,” said Supervisor Jim Beall.
The Board of Supervisors Tuesday considered cuts to services and stopped work on several capital projects totaling $8.8 million.
The County’s stopgap plan uses one-time revenue totaling $55.6 million and eliminates $15.4 million in technology and construction renovation design projects.
Two of the larger projects are $2.5 million to design replacement facility for the Narvaez building and $1.5 million to design of a multi-service health center on the grounds of Valley Health Center. Both facilities would replace overcrowded facilities that provide Drug and Alcohol Dependency Services, Mental Health and Public Health services. A third large-scale project is the Wright Center Implementation Phase I, a probation project to remodel space in an existing facility to accommodate group program space, classroom, interview rooms and work areas for clinicians. Thirteen other projects also would be suspended.
“We have a pretty good handle on expenditures,” said Kutras. “We know what it costs to deliver county services. Unfortunately, we don’t have the same certainty about how much revenue we’ll have. There are too many factors outside of our control.”
The County’s plan uses as a starting point a study of Legally Mandated Services commissioned by officials last spring. Programs and services identified as “legally mandated” have lower reduction amounts than other programs. County officials indicated that although programs are legally mandated, there is some flexibility in the manner and level of services the County must provide.
“Layoffs and service reductions again will be required under all of the plans,” said Kutras. “We have made budget reductions totaling $281 million during the past three years, and as a service organization there is nowhere else to go.”
Vehicle License Fees are registration fees that were reduced during the economic boom of the late 1990s.
The news that the governor had changed his mind came after a slightly gloomy workshop Wednesday evening where the council saw a list of critical and not-critical services each city department provides for the community, each other and the council.
While there was not time in the 90-minute workshop to review every department’s lists thoroughly, council did run through them and ask questions. Council will make its decisions at another workshop held January 17.
On Business Assistance and Housing Service’s non-critical list is staffing some commissions or committees, small business fee deferrals, housing rehab and façade grants, audits of BMR and economic development programs and liaisoning with the Sister City committee.
Councilman Steve Tate asked that the downtown plan – non-critical – be switched with the Albertson’s Center – critical. Also included was managing public facility projects – the Friendly Inn, El Toro Youth Center and the indoor recreation center.
Council agreed with the city clerk that some services to the council could be eliminated.
Communications are on the city manager’s non-critical list, where the annual recycling calendar costs $25,000 and with City Visions and the city’s website taking up staff time. Government and public access TV (Channels 17 and 19) were also on the non-critical list.
The Finance Department offered to give up preparing monthly financial reports and reduce some research and tracking projects.
Crime prevention, neighborhood watch programs and follow-up to misdemeanor crimes are on the police department’s non-critical list as are animal and bike licensing, background checks and answering stray animal and barking dog calls. Chief Jerry Galvin pointed out that, with barely one officer per 1,000 population, the MHPD has the lowest staff in the area.
Public Works listed as non-critical its groundbreaking services and water conservation program. Its critical list was considerably longer since it deals with water, sewers and roads.
Recreation offered to forego children’s holiday parties, the popular summer concert series, staff support of youth advisory committees, shortening open hours at the community center, give up box-office for paid events and after school programs at Village Avante and the Willows, both low-income, affordable housing projects.
None of these services has been cut yet and any cuts would be up to the council.
Service cuts will not necessarily mean layoffs at City Hall, Tewes said.
“It’s not obvious that a change in the mix and level of services will lead to the elimination of jobs,” Tewes said. “The council has indicated its intent to develop a thoughtful, long-range strategy to avoid the loss of jobs and sudden loss of services as well.”
Tewes said there is ongoing attrition among employees – there has been a hiring freeze since 2002 – and the remaining employees would be “redeployed” around services deemed critical.
