Brown: Petaluma finances stable but needs unmet

The city manager said Petaluma has $10.2M in reserve, but lacks money for street repairs and other items.|

Petaluma’s finances are the best they have been in a decade, but with future expenses looming, officials will likely seek additional tax revenue in the short term, City Manager John Brown said in a wide ranging speech on the state of the city.

The city has $10.2 million in its reserves, the most since the financial crisis, Brown said, adding that employee benefit costs continue to increase, and several big-ticket items like street repair and a general plan update need funding.

“What is the state of the city? I would say stable, busy,” Brown said. “Notice I didn’t say growing or thriving. The budget has to be managed carefully, but it is stable.”

Brown said that the Petaluma City Council would likely set a goal of placing a tax measure on an upcoming ballot, saying they would explore pursuing a sales tax or a hotel tax increase. The city last year studied placing a sales tax measure on the November ballot but decided against it after not polling high enough.

The city continues to operate with a lean staff of 305 employees, a reduction of 13 percent from a decade ago, Brown said. Several keys recent hires include making Ken Savano police chief and hiring a new human resources director, who will start next month. Other positions left to fill include fire marshal and deputy police chief.

Brown reported that the city issued 1,955 building permits last year, compared to 1,530 in the previous year, a key indicator of economic health.

“As far as development is concerned, we continue to be strong,” he said. “With respect to real estate, we are doing pretty well.”

The average home sale price is $617,000, up from $585,000 last year. Developers built 270 new housing units in Petaluma in the past year, and another 600 have been approved, Brown said, adding that 1,300 housing units are in various stages of approval.

“We’ve seen a surge of activity as the market has come back,” he said. “You’ll see that there will be some housing stock come online in the next few years.”

Brown previewed several city projects underway or planned for the coming year, including adding a digester to the Ellis Creek Waste Water Treatment Plant to generate compressed natural gas, finishing the downtown water main rehabilitation and replacing roofs on city buildings. The city is working with the Sonoma-Marin Area Rail Transit agency on developing a commuter rail station at Corona Road and continues negotiations to open Lafferty Ranch as a park.

Brown said it was too early to predict the impacts of the Trump administration at the local level, but he added that the city does rely on federal funding including for public safety and other programs through federal block grants. Several California cities, including Santa Rosa, are considering adopting so-called sanctuary status by refusing to cooperate with federal immigration officials over the new administration’s policy of mass deportations.

“We have no idea what the impacts might be,” Brown said. “There are a number of federal sources of funding worth being worried about.”

(Contact Matt Brown at matt.brown@arguscourier.com.)

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