Community Voices by Marie Blankley: Gilroy City Council cuts Recreation Depart-ment budget by $1.2 million

Reduced revenue due to COVID-19 forces city to cut every department

Gilroy Junior Guard participants display their certificates after completing the program. 
Photos courtesy Gilroy Recreation Department

By Marie Blankley

Marie Blankley

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 (at $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 2020 and 2021 ($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 well-being, 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 at less than 100 percent, 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 percent of the costs should be paid by users of those programs. This number is 20 percent for youth and teen programs and 60 percent for aquatics programs. The rest would be intentionally subsidized by the city.

In early 2019 when the Gilroy City Council was preparing to adopt the budget for fiscal years 2020 and 2021, 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 (at right) shows how much of the cost of our recreation staff is supposed to be recovered by them through what they charge users (per the Gilroy 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:

• $542,000 to the Youth Center at San Ysidro Park, under Youth and Teen programs (The Youth Center is also subsidized by an additional $300,000 per year from collaborations with other nonprofits and grants.)

• $450,000 to the Senior Center, under Adult programs

• $460,000 to Aquatics

• $187,000 to After-school programs and summer day camps

• $160,000 to Progressive programs

• $120,000 to Park/facility reservations and special events

• $120,000 to Youth sports

• $115,000 to Adult sports

• $115,000 to Early Childhood recreation

• $55,000 to Adult special needs

• $45,000 to Support volunteers

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 percent 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.

Children create arts and crafts during the Kids Discover Arts program. The Gilroy Recreation Department’s budget has been cut by $1.2 million due to the COVID-19 global pandemic.
Photos courtesy Gilroy Recreation Department

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.

The Gilroy City Council voted 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. 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 programs.

Marie Blankley is a member of the Gilroy City Council and a CPA.