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Hughson lays off five employees

POSTED February 15, 2011 8:54 p.m.

Facing an unexpected General Fund deficit of $172,000 this year – expected to balloon to $514,000 next year – the Hughson City Council agreed to cut five of the city’s 23 full-time staff members in an effort to balance the budget.

“These are important positions to the city,” said Hughson City Manager Bryan Whitemyer at Monday’s council meeting. “...These are filled positions, and they have done a great job for the city. Unfortunately, our means do not allow us to continue with those options.”

Eliminating the five positions — the code enforcement officer, senior building inspector, redevelopment agency and housing programs analyst, office assistant II and parks and recreation coordinator — will save Hughson approximately $280,000 annually, according to Whitemyer. But employees question whether the cuts will save Hughson as much as projected.

Redevelopment and Housing Programs Analyst Linda Kuiper, addressing the council before the vote, listed myriad accomplishments over her five and a half years working for the City of Hughson. She told of tens of thousands of grant money secured and countless dollars saved by doing work herself, avoiding consultants.

"This is all cost savings and money savings to Hughson,” Kuiper said, “And if I'm not there, who is going to do it?"

Micheal Brown, Hughson’s senior building inspector, told a similar story.

In August 2010, Brown was forced to miss five weeks of inspections due to a broken ankle. To hire a part-time consultant for just that work cost $5,300 – even with Brown remaining in the office to perform other building department duties.

Brown, Kuiper and other city employees joined together to lobby the council to hold off on cuts until staff had more time to review the budget. Whitemyer has been with Hughson for just over two months, while Interim Finance Director Margaret Souza has worked with Hughson’s budget for only a month. The employees on the chopping block hoped that, upon further review, a solution would appear in the budget.

"Once the employees that are being cut are gone, they're gone,” Kuiper said. “... Those are real people with real lives and real responsibilities, just like you."

But the cuts were inevitable, according to Whitemyer, with the city facing a projected $749,000 deficit over the next two years and holding only $646,000 in reserves. Even if unions negotiated an effective 15 percent pay cut, well above and beyond the cuts negotiated in other cities, the move would save Hughson only $90,000 at best – not enough to save the five employees.

“Right now we're playing defense,” said Hughson City Councilman Matt Beekman. “We’re having to do some major cuts and it's in no way a reflection of work product or anything like that, it's just the revenue isn't there. We have to do this in my opinion.”

The unanticipated budget shortfall, brought about by the down economy’s sinking property tax revenues, was made worse by prior Hughson employees’ mismanagement.

Salaries were inappropriately billed to the redevelopment agency account. The Senior Center cost Hughson $60,000 more than anticipated due to a miscalculation. Benefit assessment district fees were collected – and forced to be returned – for subdivisions which were never built. County impact fees were mistakenly tabbed as Hughson revenue, rather than marked to be forwarded on to the county. A past public works director was paid salary for a year and a half without stepping into a City of Hughson building. And many developer liability accounts, established to fund city work on developers’ behalf, are running negative balances, presenting up to an additional $90,000 in costs Hughson may have to cover.

Given the sheer scale of the deficit, compared to the $1.9 million total General Fund budget, cutting staff was the only way to balance the budget, Whitemyer said. But union representative Doug Gorman lobbied for a combination of union negotiations, reserve use, and borrowing against Hughson property to bridge the gap until the economy recovers.

"It's a rainy day in Hughson and I think it's time we use some of that money," Gorman said.

That recovery could be a long time off, though, given how Prop 13 assesses property taxes. As the tax can grow a maximum of 2 percent each year, it could be until 2043 before Hughson’s revenues return to their 2007 high, Souza said.

Hughson City Councilman George Carr cast the lone vote against the downsizing. He declined to comment on his reasons for voting against the proposal.

The downsizing will see the City of Hughson vacate the City Hall annex, moving all city employees to City Hall and the Senior Center work area. The shift is expected to create additional efficiencies, and allow Hughson to repurpose the annex as business space for lease, a satellite office for another governmental agency, or perhaps a business incubator.

Beekman was especially supportive of the incubator idea, seeing opportunity in the loss of five employees. He pressed for Hughson to address its budgetary issues by encouraging business development.

“We need to go on offense, start drawing businesses to Hughson,” Beekman said. “Let's make some lemonade out of lemons, let’s set up a business incubator there. That's not a stretch.”

To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.

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