Layoffs likely at City Hall

Petaluma leaders likely will lay off 10 City Hall employees and slash programs in parks and public works to balance a $35.5 million general fund budget that is short on frills.

City Manager John Brown said Monday that declining tax revenue — plus the failure to negotiate a voluntary pay cut with employee unions -- left him with no choice but to eliminate positions.

Combined with other cost-cutting measures such as contracting with a private firm to run public pools and postponement of new library carpeting, the spending plan will eliminate a projected $4 million budget gap.

"At this point, a layoff scenario looks like it makes a lot more sense," Brown said.

However, a council majority wasn't willing to accept one of Brown's recommendations — cutting three police officers in a department of 102 employees. They said they would rather deplete accounts set aside for emergencies.

"It would be great to have the reserves, but I'm not willing to cut bodies to do that," Councilwoman Teresa Barrett said.

Brown proposed several ways to shore up the rainy-day fund, including the one-time sale of surplus property and charging nonresidents for emergency services. But he said it was a risk.

"I've never been down to this level" of reserves, Brown said. "And I'm not very comfortable with it."

Doug Silacci, head of the city's largest employee group, said Brown's office ended negotiations abruptly last week. In a letter last month, Silacci said Brown sought a 9 percent cut in exchange for not laying off 30 people.

"We were moving forward, I thought," Silacci said. "I'm disappointed in the decision."

Like other cities, Petaluma has struggled to balance a budget in the face of declining sales and property tax revenues.

In anticipation of a shortfall, it made a number of midyear cuts but found more were required to balance the spending plan that begins July 1.

And the situation isn't likely to get better any time soon. Brown said tax revenue is expected to remain flat through the fall.

Council members had their own ideas for saving money. Mayor Pam Torliatt said the city should look into how much money is spent putting down stray cats. Barrett said a program to reduce the amount of pharmaceuticals dumped into the sewer system could save money in the long run.

Councilman Mike Healy brought up a proposal that has divided the environmental majority council: build a shopping center to generate taxes.

Healy presented the council with a letter from development firm Merlone Geier, which is pursuing a big-box home improvement store on the east side of town.

The letter said Petaluma would receive $5 million in development fees and an increase in property taxes of $140,000 a year. Also, the city would collect annual sales taxes of $345,000 -- the cost of three police officers.

"I think we should try to get these through the process . . . either that or explain why we are willing to ruin our reserve," Healy said.

Councilman David Glass said he was wary of spending based on anticipation of the revenue.

"No matter what malls you have . . . there is a finite amount of revenue," Glass said. "I don't know if the community has come to grips with that."

You can reach Staff Writer Paul Payne at 762-7297 or paul.payne@pressdemocrat.com.