City Hall must help itself first

<p>I would like to share my assessment of the city of Petaluma’s budget situation in the current economic crisis.</p><!-- Nothing to do. The paragraph has already been output --><p>Petaluma’s general fund revenues (the money used primarily for police, fire and parks) peaked during fiscal year 2006-07 at $52 million. In the current FY 2008-09, general fund revenues are now projected at $36 million. The projection for FY 09-10 is $35 million, about 33 percent less than three years before.</p><p>The city has had one round of layoffs impacting important city services. For instance, the two police officers assigned to the high schools have been eliminated, community development staffing was halved, the swim center season has been severely curtailed, and routine maintenance has been reduced from already inadequate levels. Another round of cutbacks is all but inevitable. The city has now largely used up its reserves to lessen the reductions needed to date. </p><p>One possibility under consideration is offering voters a chance to enact a temporary quarter-cent sales tax surcharge. (The city gets precisely 1 cent of the 7.75 cents of sales tax on every dollar of taxable goods sold; the rest goes to the state, county and schools.)</p><p>Petaluma voters have not hesitated to approve quarter-cent sales tax increases when compelling cases have been made for them. In November 2006, Petaluma voters supported Measure F, extending the county-wide open space tax, by an overwhelming margin of 78 percent to 22 percent. In November 2008, Petaluma voters supported Measure Q, to fund SMART rail, by a margin of 75 percent to 25 percent.</p><p>Local tax measures in Petaluma, however, have failed miserably. The most recent attempt was in 2003, when voters rejected a utility tax to fund street repairs by nearly a two-to-one margin. Last fall, Measure K, the draconian water and sewer rate rollback proposal, was defeated narrowly only after a determined grassroots campaign. </p><p>These results demonstrate a deep and pervasive sentiment among Petaluma voters that City Hall has not been a good steward of our municipal finances.</p><p>Currently, the marquee issues supporting that sentiment are several high-profile development proposals that would, collectively, provide significant financial relief to the city, along with other benefits. The Regency proposal for a Target center at the former Kenilworth site would provide $1.2 million annually in sales tax revenues for the city, plus property tax increment for the redevelopment agency and the opportunity for citizens to avoid driving on 101 to do basic shopping. A major hardware and building supply store would provide $500,000 yearly in sales tax revenues. The proposal to convert the Old Silk Mill to a 100-room hotel would generate $250,000 annually in hotel tax revenues. Yet each of these proposals has been greeted at City Hall with red tape, delays and general indifference.</p><p>Therefore, a cornerstone of repairing City Hall’s reputation for fiscal responsibility is making timely decisions on these proposals. I support making these decisions without further delays. </p><p>A related point is that many citizens are not convinced that City Hall has done all it can to minimize increases in water and sewer rates. We need a thorough and public reexamination of rates, eliminating any costs that are not essential. This has been promised, but I am frustrated by the delay in getting started.</p><p>Only after City Hall has repaired its reputation for fiscal management by working through the backlog of development applications and re-examining water and sewer rate increases should we ask voters to consider any temporary tax increase. But I would point out that the three development proposals discussed above — assuming each is approved — would collectively provide about $2 million in annual revenues to the city. All other things remaining equal, that would still leave General Fund revenues 29 percent below FY 06-07 levels, meaning that severe service level reductions would remain in place.</p><p>I am hopeful that City Hall can work through the development applications and re-examine utility rates over the next few months. Then we can re-assess where we are and consider whether it is appropriate to have a community discussion about a temporary tax increase to maintain vital public services. </p><p><i>(Mike Healy is a member of the Petaluma City Council.)</i></p>