Public safety is essential to our quality of life, comprising nearly 70% of our city’s general fund budget investment. I value our police, fire department and first responders and do not want to see any of them compromised because of fiscal mismanagement. Today, the Gilroy Police Department – like police departments across the nation – is under heavy scrutiny for policies and procedures that can lead to instances of brutality. Such policies are changing nationwide and Gilroy is embracing the need for change. Whether or not we change the level of funding for our police department is a question of the services we want them to provide. Currently, our police officers respond to calls for services that would be better handled by social workers. Understanding needs and identifying necessary resources are the first steps toward removing the necessity for police officer response to homeless persons, the mentally ill, alcohol and drug abuse in public, and related issues.
Since the mid ‘90s, I’ve worked closely with several city council members and three of our police chiefs on a crime prevention task force known as the Gilroy Gang Task Force. Under Mayors Mike Gilroy and Don Gage, the Gilroy Gang Task Force was active in funding youth programs that provided an alternative for kids at risk of joining gangs. My involvement with the Gilroy Gang Task Force continues today, but much of its activity has been taken over by a more recently formed crime prevention organization called the South County Youth Task Force, which pools resources for the benefit of Gilroy, San Martin and Morgan Hill combined.
Gilroy pays for most infrastructure and street maintenance improvements through its Traffic Impact Fees (TIF). When someone applies for a building permit, for an addition to an existing building or new structure altogether, the city assesses a traffic impact fee that is meant to cover the costs of any and all traffic/road impacts resulting from the development. The same is true of the school district assessing impact fees where public schools are impacted by developments. In theory, the city should always have an appropriate amount of money set aside to cover traffic issues and maintain our roads.
Unfortunately, many of the roads we use on a daily basis are not under city ownership and control, including First Street and our freeway interchanges/overpasses. To get the repairs and maintenance we deserve, we need strong representation on regional boards to consistently and deliberately fight on behalf of residents for the deteriorating roadways. The improvements you see happening on First Street today are a direct result of deliberate and consistent pressure put on CalTrans on behalf of Gilroy residents. The length of time it has taken to complete is in part due to improvements needed first for water and sewer lines below the surface before CalTrans could address curbsides, traffic signals, and actual roadway. As you see today, it nears completion.
Where we do have control, our infrastructure and maintenance needs should be addressed through a specific target list provided by a pavement maintenance study, addressing the needs of our roads that are in the most dire shape. Gilroy should have the resources to cover the costs of local traffic and street maintenance that are under its jurisdiction and for which it receives transportation maintenance funds to cover. For various reasons, the city has lagged behind in addressing those needs and does not have sufficient funds to catch up with the backlog. We should, as a legislative body, remain persistent and pressure our regional and state representatives to provide the resources we deserve to fund pavement maintenance.
Infrastructure investment is key to keeping our city vibrant and safe. We need convenient access to roadways and railways that draw employers to Gilroy, entice tourists to visit, and encourage our residents to stay local when entertaining family and friends. Gilroy’s train station is an excellent start when it comes to mobility options. With California pushing an agenda of fewer cars on the road, connecting and improving transportation schedules between the Valley Transit Authority and CalTrain remains vital. I have served as a VTA board member representing Gilroy since January 2019, and in April 2019 succeeded in getting the CalTrain board to replace a little-used southbound evening train with one that arrived at a much more convenient time for Gilroy riders. The new train service began in October 2019. I believe that transportation convenience and efficiency directly benefit our quality of life, and I’m willing to advocate at the local and regional level for improvements in multi-modal transportation connectivity.
Economic health is vital to sustaining and improving our quality of life. I know we can do better as a legislative body to drive additional revenues through economic development, working with investors to focus on Gilroy as their next destination. The effects of COVID-19 on our revenues only make matters worse. Our financial obligations exceed our existing revenue sources and our unfunded liabilities continue to mount. It is now critical that we align our spending with the revenue we actually have. As we recover from the pandemic, we need to capture economic opportunities that help us keep our city safe, beautiful, vibrant and economically healthy. How do we accomplish this? By collaborating with agencies such as the Economic Development Corporation, the Chamber of Commerce, and the Downtown Business Association to establish a pro-business climate that new investors will embrace. We must also address the issues they confront when working with our city government and ensure that the city itself is not a hindrance through unnecessary and inefficient regulations and processes. I recognize the benefits to Gilroy from developments that bring jobs and help sustain our local economy; bringing in businesses not only improves our economic health, but also assists our community by relieving commuter traffic, allowing our friends and neighbors to spend more time with their families.
We cannot survive as a bedroom community alone – we need to change the image that paints Gilroy largely as a commuter town with little to offer. Too few employers see the city as a place where they can thrive. By collaborating with Gavilan College, we may find ways to change our image. To have the ability to both live and work in Gilroy saves countless hours on the road, keeps dollars local, and improves our quality of life.
Our city could have been better prepared and should have worked harder to capture the economic opportunity presented by Great Wolf Lodge. Today, we hope to bring facilities operated by the San Jose Sharks to Gilroy. To ensure we’re ready, the Gilroy City Council has already approved the necessary environmental reviews, agricultural mitigations, and amendments to the Sports Park Master Plan to accommodate such facilities should negotiations with the Sharks proceed successfully. Such amenities to our Sports Park will attract visitors and anchor recreation in Gilroy.
Of all of the types of dollars the city can help drive, by far the best is the tourism dollar. Why? Because of the Transient Occupancy Tax (TOT). Tourists spend their money here, then leave, allowing us to use those revenues locally for our needs. We need to invest in our community wisely, looking at options that provide a healthy return on our investment and convert otherwise idle properties into sustainable sources of revenue.
I have and will continue to support efforts to improve and vitalize our downtown. While there has been much improvement over the years, it remains a challenge to work with out-of-town property owners. I stand behind the efforts and concerns of the Gilroy Business Downtown Association, which tries to educate us about what is and isn’t working, and calls to our attention areas where the city itself stands in the way of progress.
The city’s housing element must accommodate various types of housing for a variety of income levels. Gilroy must comply with outside regulations that define and dictate to us what is affordable and how much of such housing we must allocate for.
How and when we grow should follow economic development. Employers, businesses, and restaurants alike are willing to locate where they can thrive. Cities that aren’t growing (or who send a message that they lack growth) will deter employers, investors and businesses who see their employee and customer base as limited. Asking them to consider being located in Gilroy while we artificially limit residential growth is counterproductive. While I understand the citizen concerns that led to Measure H, I did not support it. The land that is available within our existing city limits is not sufficient to attract, let alone allow us to take advantage of, development opportunities that may provide great benefits not only with revenue, but with schools, parks, trails, jobs, street widening and costly infrastructure. For now, our development opportunities will be limited to what infill can accommodate, which means we’re likely to see high-density, lower-cost housing, which aligns with SB 330, the state’s new housing law enacted 1/1/20 that pushes for residential growth across the state. In addition, SB 330 made accessory dwelling units more attractive to build and rent as another way of providing lower cost housing.
As many of us may know firsthand, homelessness is often a chronic problem for individuals, with many unable to find permanent solutions even after decades of effort. Cities and counties together are working towards improving conditions under which the homeless may find solutions. I am proud of the churches, the Compassion Center, and the many other local charitable organizations and volunteers who persist at helping those who otherwise would not have food, shelter, or someone to talk to. I support the efforts of all of our local organizations that help us to help others. I also acknowledge, however, that there are homeless individuals who we can’t let remain so because they disregard the law and commit crimes. No matter the reason for homelessness (mental illness, addiction, job loss, financial crisis, to name a few), police intervention only momentarily solves the problem. As your mayor, I intend to hold open study sessions among the entire City Council and the public to brainstorm workable options that will provide social services and shelter to those who need it.
As many are now aware, the Recreation Department for the City of Gilroy will downsize as part of the necessary general fund budget reductions to address the loss of income from COVID-19 and the City’s ongoing budget shortfall. One-time expenditures for long-awaited projects have been deferred ($7 million), the City will use its emergency reserves ($4 million), and employee positions and compensation across all departments will be reduced or frozen for fiscal year (FY) 20 and FY 21 ($8 million). Within that latter $8 million of proposed reductions in general fund expenses, $1.2 million is specific to the Recreation Department.
To anyone listening to the nearly two hours of public comment at the June 1 council meeting, it was a testimony to the value of and love for our recreation programs. Anyone who has ever used Gilroy’s recreation programs, myself and my family included, would testify to how wonderful they are. Recreation is more than just “fun”. It is health and wellbeing, and it brings our community together. At issue, however, is not the programs themselves, but rather, how we pay for them.
Gilroy’s City Charter promotes recreation and its benefits by subsidizing programs across all ages. By ordinance, we deliberately set most cost recovery percentages under 100%, with the intent to charge program users less than the cost to the City to provide recreation programs. For the remainder that is not recovered, the City pays the difference. For example, by ordinance for adult programs, 50% of the costs should be paid by users of those programs. This number is 20% for youth and teen programs and 60% for aquatics programs. The rest would be intentionally subsidized by the City.
In early 2019 when the City Council was preparing to adopt the budget for FY 20 and FY 21, we were presented with actual cost recovery percentages that didn’t meet their ordinance thresholds, resulting in a far greater percentage of recreation staff compensation being paid out of the general fund. The table below shows how much of the cost of our recreation staff is supposed to be recovered by them through what they charge users (per the City Charter), and how much they actually recover. These numbers are from FY 2018 as presented to Council in early 2019. The table should be viewed with the understanding that where we fail to meet the cost recovery percentage stipulated in our ordinance, we have to either cut programs or take that much more from the general fund, the latter of which is not always feasible.
The total dollar amount taken from the general fund to cover what is not paid for by users is currently $2.7 million per year. The majority goes to the following recreation programs (2018 actual numbers) and primarily represents compensation for Recreation Department staff:
Consider the general fund as a pot of City revenue for which there are many competing interests (police and fire accounting for close to 70% of the general fund, followed by community development services and administration). Now imagine that the total amount in that pot has gone way down. Now look at the departments that are using general fund money that should not be but have been allowed to because money was not as tight. This is where Recreation falls.
Now, under today’s circumstances, we have to reduce the amount we have been taking from the general fund and get back to a cost level that can meet the cost recovery percentages set for the Recreation Department. When programs that are restricted this year due to COVID-19 are able to return, our Recreation Department can focus on a much better and more transparent cost recovery system. Programs that don’t require additional subsidy from the general fund may resume immediately once COVID-19 restrictions are lifted.
The Gilroy City Council voted on June 1 to reduce the general fund transfer to Recreation by $1.2 million, from $2.7 million to $1.5 million for FY 21 as part of the overall General Fund Financial Recovery Plan to attain fiscal sustainability and keep Gilroy solvent. The $1.5 million remaining to subsidize Recreation is what we are purposefully spending under today’s circumstances to keep particular programs alive and essentially free for our vulnerable youth, elderly, and special needs populations.
This is not an ideal state for our community, but current circumstances demand that something change. That change may come in many forms, from focusing on our parks and facilities while outside sources run some of our programs (such as the YMCA or other recreation and sports providers), to actually charging program users for the cost of the programs they use, with discounts based on various criteria. There is a lot more work to do, and we all look forward to the day when COVID-19 and all of its effects are behind us, and to the day when we can add more community to Gilroy through recreation.