After months of agonizing union talks, increased crime and slipping morale, news of the money immediately delighted city council members and police officials. The Gilroy Police Department was the only agency in the county to receive money, Sgt. Jim Gillio said, and one of 109 recipients across the state. The grant will result in 649 new hires and a handful of re-hires statewide. More than 7,200 agencies throughout the country, out of nearly 18,000 applicants, received $1 billion thanks to President Obama's mammoth economic stimulus plan.

Chief Denise Turner, whose sworn force stands at 56, originally asked for $2.8 million to hire seven officers. She and her staff are now preparing a new scenario for the council to consider Sept. 14 because the federal funding expires after three years and the terms of the Community Oriented Policing Hiring Recovery Program Grant require the city retain grant-funded officers for an additional year without federal cash.

A first-year officer costs Gilroy about $138,000 annually in salary and associated benefits. In addition, it takes four to six months to train an officer transferring from another department and up to a year to certify a civilian, according to Gillio and city figures. That comes out to $1.24 million for three years, which exceeds the grant by about $80,000. That total also excludes the mandated fourth year that will cost Gilroy at least $414,000. By then, though, police hope the economy will have rallied.

"The chief has the purview to assign these officers wherever they need to be to get the most bang for our buck," Gillio said. "I can definitely see this money helping us attract officers transferring here (from another department) because they know their position will be secure, and hopefully at the end of the three years the economy will be up again."

Police will also continue talking with the Gilroy Unified School District, which voted in April to pledge $165,000 between 2012 and 2014 toward the positions. Turner also originally imagined the two traffic cops would generate enough revenue through tickets to offset most of the city's potential expenses, but she and city finance officials will crunch numbers for the council's consideration.

The city will also save money by not filling four officers' positions this year. Two officers quit the force amid the council's budget talks earlier this year, bringing the department down to 56 sworn officers, and two more will retire in the coming months. When the Gilroy Police Officer Association approved $1.1 million in cuts over the next year, they did so through furloughs and raise postponements, but they also achieved savings - and complemented the city-wide hiring freeze - by agreeing to not re-hire those four positions, a point Mayor Al Pinheiro stressed amid his praise.

"This is great news and a great opportunity for us, and I'm very happy, but let's remember we're asking for three more officers but we just let four go away," Pinheiro said. "It's important that we all understand why we're in the position that we're in."

No sworn officers have been laid off this year, but across-the-board cuts at City Hall removed a Santa Clara County probation officer, a public records technician and one part-time and two full-time community service officers who dealt with graffiti, animal control and neighborhood issues. A previous hiring freeze also prevented Turner from hiring more officers, which a hired consultant recommended along with Turner herself. Gilroy has about 1.13 cops per 1,000 residents while the national average is about 1.8, according to the Bureau of Justice Statistics. Getting to the national average would require 90 officers, and that's a financial impossibility given Gilroy's $1.6 million general fund deficit.

Topping the list of California recipients were the Riverside County Sheriff's Department, the San Francisco Police Department and the Los Angeles Police Department. Each received funding for 50 positions thanks to individual grants ranging between $12 million and $16 million.

"We think this is a significant award for the city of Gilroy, and it's not to be underestimated how difficult it was for Gilroy to qualify in Santa Clara County, which is one of the wealthiest counties in country," City Administrator Tom Haglund said.

While seated in a lucrative area, Gilroy's crime rate shot up during the application process when the city experienced its fourth killing in 13 months. The national government also looked at how police here respond to the nearly 45,000 calls dispatchers pass on to them each year. Projected city revenues, the likelihood of future layoffs, local unemployment, poverty and foreclosure rates also factored in. The statistics generally portray Gilroy as more deserving of federal money than, say, Morgan Hill, which applied for $2.5 million in grant money to hire five officers, Morgan Hill Police Commander David Swing said.

"We're disappointed we didn't receive the funding, but we're going to continue to develop programs and funding to keep the city safe," Swing said Tuesday, adding that Morgan Hill could still receive funds if some cities decline the grant based on its strict requirements to maintain staffing levels - which essentially translates to a no-layoff rule.

In addition to the Community Oriented Policing Hiring Recovery Program Grant, Gilroy police have also received more than $90,000 in stimulus funds for the purchase of equipment and the continuation of DARE anti-drug programming, which a non-sworn officer has since taken over. The grant money also came from the American Recovery and Reinvestment Act of 2009, and it came through the Edward Byrne Memorial Justice Assistant Grant Program.

Gilroy will spend $20,000 to develop its the electronic filing system that stores videos from police cruisers and another $16,151 for additional surveillance equipment. The rest of the money - plus nearly $33,000 from the school district - will pay for a community service officer who would have otherwise lost her job this June due to layoffs. The officer, who earns a $64,572 salary and an additional $22,596 in benefits, teaches the Drug Abuse Resistance Education, or "DARE" program, to fifth graders enrolled in public schools.

Local Economic indicators:

Family poverty rate ($25,790 or below for a family of five)

-9.8% - U.S.

-7.8% - Gilroy

-7.6% - Hollister

-5.3% - Morgan Hill

Source: 2005-07 U.S. Census Bureau estimates

Unemployment, Feb. '09

-8.5% - U.S.

-14.7% - Gilroy

-17.6% - Hollister

-12.7% - Morgan Hill

Source: U.S. Department of Labor

Officers per 1,000 residents

-1.13 - Gilroy

-0.83 - Hollister

-0.95 - Morgan Hill

Sources: Gilroy, Morgan Hill and Hollister police departments; U.S. Census Bureau estimates