Petaluma faces more job layoffs

<p>Despite early rounds of layoffs and service cutbacks, Petaluma is facing a $1.6 million mid-year budget deficit that officials attribute to rapid decline of tax revenue.</p><!-- Nothing to do. The paragraph has already been output --><p>About 25 employees were laid off in the fall, and the city scaled back programs from parks to public works to save about $3.5 million. But as property and sales tax revenue continued to slide, the city has found itself in a hole once again.</p><p>Mayor Pam Torliatt said it is likely that more cuts will be necessary -- including some layoffs -- if the city wants to balance its general fund budget, which sits at about $37 million.</p><p>"Unfortunately I don't see a way for us to avoid cutting back on staff," Torliatt said last week. "It's not going to be a very easy decision for anyone."</p><p>A mid-year report from the city's interim finance director, Tamera Haas, outlines the dreary situation. The City Council is expected to review it today.</p><p>Overall, revenue from July 1 to Dec. 31 fell about 18 percent short of expectations, coming in at about $15.2 million.</p><p>That figure was down $4.5 million or 23 percent compared to the first six months of the previous fiscal year.</p><p>Property taxes were behind 19 percent, and sales taxes fell 22 percent, evidence of the slumping real estate and retail sectors.</p><p>"This shows that revenues are declining, but what we don't know is how far they will fall and neither do the most experienced economic experts with the irrational markets and out-of-whack indicators," Haas wrote.</p><p>Meanwhile, city spending has remained within budget, coming in at about $17.3 million, mostly in salaries and benefits.</p><p>That figure represents an 11 percent decrease over the same period in the previous fiscal year, when the city spent about $19.4 million.</p><p>With low reserves, Hass said, the city will have to maintain a tight grip on expenses.</p><p>A 5 percent reduction in all departments could generate a year-end savings of about $1.8 million, according to her report.</p><p>Councilman David Rabbitt said the future is uncertain.</p><p>"The good news is we're spending less than we should but the bad news is the revenue levels are lower," he said.</p><p>You can reach Staff Writer Paul Payne at 762-7297 or paul.payne@pressdemocrat.com.</p>