City Council reviews budget challenges ahead of June 9 hearing

The City of Hollister is facing significant budgetary challenges as it prepares for the fiscal year 2025-26 budget, with a crucial hearing set for June 9. During a recent city council meeting, officials highlighted the need for substantial cuts, estimating reductions between 10% and 17.5% due to recent discoveries of underbudgeted expenses and unposted transactions from prior years.

City staff presented a detailed overview of the general fund's financial history, revealing a troubling trend of deficits. For instance, while the city reported revenues of $50.6 million in 2022-23, nearly $9.7 million of that was one-time federal funding from the American Rescue Plan, which masked a deeper financial shortfall. Without this funding, the city would have faced a $9 million deficit that year.

The current budget anticipates $50 million in revenue against $52 million in expenses, indicating a reliance on reserves to cover the gap. City officials emphasized the ongoing need for additional staffing to manage workloads effectively, despite previous requests for nearly 30 new positions being denied due to budget constraints.

The meeting also addressed the status of financial audits, with staff working to finalize responses for the 2021-22 audit. A clean audit opinion was received, but multiple repeat findings from previous years highlight persistent issues in financial management, including problems with cash handling and grant management.

As the city navigates these financial hurdles, the upcoming budget hearing will be critical in determining the path forward, with officials urging careful consideration of proposed cuts and staffing needs to ensure the city's fiscal health.