Outlook shows promise for Grass Valley
December 19, 2012
Forecasts for Grass Valley call for a tenuous and limited economic recovery in the short term but with better promise in the long term, according to City Manager Dan Holler.
Holler's assessment was delivered shortly after one Grass Valley City Council member concluded her tenure, a new one was sworn in and a new mayor and vice mayor were appointed, when the city manager gave the newly organized governing body an appraisal in his annual State of the City address.
Most of the city's current state can be traced to the economic downturn, which Holler touched on several times during his comments at the Dec. 11 council meeting.
"The challenge is still tenuous," Holler said. "We're coming out of the most intense economic collapse in recent memory."
Not only is the city's nearly $10.1 million general fund $1.5 million lower from its fiscal year 2007-08 peak, at nearly $11.56 million, but that revenue has resulted in expenditure and staff reductions and the use of city reserve funds, Holler noted in his report to the council.
The continuation of the economic decline and its severity resulted in a number of more significant and structural changes in the city, Holler reported. This included significant reductions of 33 personnel, deferred capital investment, elimination of capital projects, reduced operating hours and reductions in employee costs through contract negotiations.
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"We're basically meeting core services," Holler said.
But not all of the city manager's remarks were doom and gloom.
Passage of the city's proposed half-percent sales tax increase is estimated to bring in $2.4 million annually to the city. While Measure N funds will be allocated to the city's general fund, the city has outlined priorities, such as the police department hiring five more officers, hiring 2.5 firefighter positions and investing in city street maintenance.
Even though Measure N was a general tax, necessitating approval from a simple voter majority, it passed with 66 percent approval — close to enough to have been passed as a special tax that requires a two-thirds majority. Holler said the support is indicative of residents' trust in the city as fiscally responsible.
"The past election was a strong compliment to the city," Holler said.
Holler didn't pat the city too hard on the back, switching gears and giving a lukewarm forecast for the coming year, which he described as a continued "soft" local economy.
While the Dorsey interchange is on the horizon, Holler notes that there is no major private construction activity in the pipeline.
Nonetheless, the city has annexed the 452 acres of the planned Loma Rica development, a proposed mixed-use project expected to feature single-family houses, cottages and multi-family units along with commercial properties.
"That is a positive that can actually move forward to development," Holler said.
Holler said the city needs to expand its revenue base or continue to face a high level of fiscal stress.
"Our hands are pretty well tied in terms of revenue development," he said.
Growth in tourism through the Economic Resource Council, supplemented with further marketing of the region, could be one way of developing the city in the long term, Holler added.
To view a lengthier report on Holler's assessment of the State of the City, click HERE.
To contact Staff Writer Christopher Rosacker, email email@example.com or call (530) 477-4236