At a recent goal setting retreat, the city council indicated
that they prefer to allow the city’s General Fund reserves to be
used to offset revenue losses, state take-aways, and other expenses
rather than proceeding with further lay-offs and cuts to an already
decimated city budget.
At a recent goal setting retreat, the city council indicated that they prefer to allow the city’s General Fund reserves to be used to offset revenue losses, state take-aways, and other expenses rather than proceeding with further lay-offs and cuts to an already decimated city budget.
We believe this is an appropriate use of these funds and here’s why:
First: this is one of the reasons why these reserves were accumulated; namely to provide a contingency for bad economic times. These funds are not just for natural disasters.
Second: the Council has already acted wisely to make other cuts in expenditures by freezing hiring, eliminating positions, eliminating programs, providing early retirement incentives.
Third: the employees unions have already given up raises totaling $460,000.
Fourth: if further cuts are made, what is left to cut? The overwhelming majority of General Fund expenses are for police and fire services. Do we further cut police patrol officers? Fire services? The city already has one of the lowest ratios of police officers per 1,000 residents in the county and the region and the fire services contract is already bare bones.
Is it better to cut these employees and services or to use rainy day funds to keep these services at minimal levels as they already are? For us the answer is clear. Use the rainy day reserves.
Fifth: what is a healthy General Fund reserve? Morgan Hill has one of the highest percentages of reserves in the county. Even after these funds are drawn down by the $1.8 million proposed, there will remain a healthy 27 percent reserve for natural disasters and other possible emergencies.
Finally, what does the future hold? None of us can predict the future, but we do know we are beginning to see some signs of recovery. There is time to make a course change a year from now if necessary. Let’s not overkill by making further cuts now.
Now is the time to use those rainy day funds.
