WATSONVILLE — The Watsonville City Council approved a $144 million budget Tuesday that includes a number of new positions but no raises for lower level workers.
Assistant City Manager Matt Huffaker said the city’s budget picture has been improving as sales and property taxes have been increasing in recent years. The General Fund has also reached a reserve of 20 percent, which was a target set by the city council a number of years ago, according to Huffaker.
The budget also calls for new positions such as a half-time assistant for the City Clerk’s Office, a plan examiner for the Community Development Department, a recreation specialist for Pinto Lake City Park and more.
Revenue from Measure M, which directs funds from a cannabis tax to various city departments, would also result in new positions including a code enforcement officer and a Police Activities League recreation specialist.
“The focus of these additional positions is where we’ve been very lean staffed,” Huffaker said.
But as the budget picture improves, there are a number of issues that will be costly for the city in the near future, namely rising retirement costs, he noted.
Increases in pension costs will result in an additional $6 million over the next five years, according to Huffaker.
“These are big numbers and we really have to spend time with this over the next five years to come up with solutions,” he said.
Deferred maintenance on city facilities is also a major issue, Huffaker added, as well as retaining employees with competitive compensation.
The city has reached agreements with five bargaining units, according to Huffaker, with Service Employees International Union Local 521, Operating Engineers Local Union No. 3 and Fire still in negotiations.
A number of city workers representing SEIU Local 521 and OE No. 3 attended Tuesday’s meeting, a day after a large group staged a rally in the Watsonville Plaza demanding raises.
Olivia Martinez of SEIU said city officials continue to “balance the budget on workers,” and questioned recent spending decisions, such as a new logo and website for the city.
“Line staff provide services to the community directly, and when you are not investing in them you are not investing in the community,” she said.
Michael Moore of OE No. 3 said the decision comes down to “dignity and respect.”
“If you respect your workforce, you do right by them,” he said. “If you don’t respect them, you continue down the same thing you are doing now.”
Huffaker said city staff ran projections on how a raise for the lower-paid workers would impact the budget. A three percent raise in the first and second years of the contract would result in a deficit for the city of $600,000 in 2020 and $1 million in 2021, according to Huffaker.
Councilman Jimmy Dutra said he was having a “hard time” with the budget.
“We can’t give these people raises, yet we are hiring more positions,” he said. “To spend the amount of money on the rebranding when we have our employees who haven’t seen a raise in a long time, I have a problem with that.”
City Manager Charles Montoya said all but one of the new positions the city will hire will generate revenue, such as coordinating RV rentals at Pinto Lake and working on projects that come through the Community Development Department.
“We don’t disagree that they deserve to get paid fairly,” he said, adding that the city has a “positive future” with three tax-generating hotels expected to be constructed soon. “We can’t bid out the revenue that we don’t have in our pockets right now.”
The budget passed unanimously, with Councilwoman Rebecca Garcia voting no on a five percent increase in compensation for council members, which equates to about a $25 raise. Council members will now be compensated $551.25 per month.