With severe financial woes hovering over Guadalupe, the City Council on Tuesday night approved cutting its top employee’s salary by 5 percent.
The council also expects to trim other city employees’ salaries later this summer by 5 percent and will ask voters in November to approve three measures expected to raise revenue.
The unanimous approval of the revised contract means that City Administrator Andrew Carter will receive more than $97,000, instead of $102,500 annually. The pay cut became effective July 5.
The city administrator originally recommended that the council cut his salary by 7.3 percent, but the members balked, and decided Carter’s salary reduction shouldn’t exceed the rest of the staff, Mayor Frances Romero said.
“He works an awful lot of hours,” Romero said, noting that Guadalupe doesn’t have many positions typically seen in California cities, leaving Carter to fulfill multiple duties.
A couple of staff members told Romero that they didn’t think his salary should be cut more than the other employees, she added.
Carter, a former member of the San Luis Obispo City Council, was hired to lead the city of Guadalupe 16 months ago.
In all, Guadalupe has 43 full- and part-time employees, who also will be asked to take 5 percent pay cuts. Those reductions still have to be worked out with labor groups and most likely won’t take effect until September.
“As the leader of the organization, I’m putting mine in first,” Carter said before the council meeting.
During an all-employees meeting, Carter said he learned the city’s top administrator hasn’t always taken a salary reduction in the past.
“From a personal standpoint I was appalled,” Carter said, adding he made it clear he would be among those getting paid less.
Once implemented, the reductions are expected to save the city about $218,000 annually, Carter said.
The salary reductions are just one method to recover from Guadalupe’s severe financial woes that led to a deficit of $725,000. The already-lean city with a population of 7,100 also cut $75,000 more from its expenses.
And the council last month agreed to ask the city’s voters to approve three measures aimed at boosting revenues. Each one will require more than 50 percent of voter approval to pass in the Nov. 4 election.
If approved, the first measure would increase sales tax by one-quarter cent, and would end after 8½ years. Of the 8 percent sales tax now paid in the city, Guadalupe only gets 1 percent of that revenue with the rest going to other agencies.
Another measure would revise the business license rate, which Carter said had not been updated for decades. Currently, businesses pay $60, $90 or $120, regardless of their size.
The revised statute would base the rate on gross receipts of 50 cents per $1,000 of revenue, with a minimum of $100 per home-based business or business without a fixed location and $200 for businesses with a fixed location in the city.
The third measure would remove a $2,250 cap on the utility user tax which now is 5 percent for water, electricity, natural gas and phone customers. The rate wouldn’t change. To reach the cap, a customer has to spend $45,000 on utilities so removing it wouldn’t affect homeowners or most businesses in Guadalupe, Carter said. On the other hand, a large utility firm like Apio Inc. with two large facilities for cleaning and cooling vegetables quickly hits the cap.
If approved, the three revenues sources could bring in $325,000 in additional funds to run the city, Carter said. However, much of that income wouldn’t appear until the next fiscal year so the budget for the current fiscal year has a deficit
— Noozhawk North County editor Janene Scully can be reached at jscully@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.