Funding cuts threaten Petaluma homeless services

A funding cut outlined in Petaluma’s proposed budget could send the city’s largest homeless service provider into a “death spiral,” a top Committee on the Shelterless official said Tuesday.

The city’s $181.98 million draft spending plan proposes a $70,000 reduction in funds allocated to COTS, a line item that’s drawn a stark critique from the community. An online petition opposing the 47 percent reduction garnered more than 1,000 signatures, along with a chorus of protest at Monday’s Petaluma City Council meeting.

COTS CEO Mike Johnson, whose nonprofit has long partnered with the city to provide shelter, work and food assistance to Petaluma’s most vulnerable residents, implored the city council to keep funding at the current $150,000 level for the upcoming budget cycle, which begins July 1. He’s also seeking a long-term funding solution to avoid further reductions to the nonprofit’s budget, which is already hard hit with other steep cuts.

“We do believe that a city in any community, anywhere, has the responsibility of helping to deal with homelessness generated in the community … It’s expensive to live here,” he said. “Petaluma is cranking out homeless people at the second highest rate in the county, second only to Santa Rosa. The question becomes do communities large and small have a responsibility to help solve the problem of homelessness that they are themselves creating? I would answer yes. Absolutely.”

COTS took a fiscal hit after the 2011 dissolution of the city’s redevelopment agency, which provided as much as $3 million yearly for affordable housing projects and nonprofits. Since the end of redevelopment, which sequestered tax dollars for community improvement projects, funding for COTS has come from a pot of money generated from developers who opt to pay a fee rather than include affordable housing units in their projects.

Those in-lieu developer fees are intended to fund affordable housing projects, City Manager John Brown said, and COTS and other nonprofits were told allocations were set to gradually decrease to wean agencies from the limited funding source. Reductions in allocations to COTS and other agencies are reflected in the upcoming budget. The city council has the ability to draw from the fund balance to bring the amount for COTS back to $150,000 this year before the spending plan is approved in June, he said.

“That’s basically the issue, is the council willing to extend this and dip a little further into the fund balance? … What COTS is saying is ‘We need a year to find another solution,’” he said. “There’s the capacity for that, but it’s a declining fund balance like everything else.”

Johnson said funding has already been reduced and he fears this year’s cuts may give way to a total loss of city funding the agency had not anticipated. If approved, cuts this year could lead to reductions in hours, services and staffing at the agency, which already gets about half of its more than $3 million budget from private donations and would need to scramble to fill the gap, he said.

“I don’t know if this community has the capacity to step in and fill that gap and I don’t think they should. I think the city has some responsibly in funding services,” Johnson said.

Lessening COTS’ ability to provide service would result in higher costs for policing, cleanup, and other services billed to the city, while hobbling the nonprofit’s ability to show successful results and making it less likely to receive funding from other sources, Johnson said. He stressed the value of continuing to partner with the city, and sought a reliable funding source from a tax or a fee increase that could be at least partially funneled to COTS, while not detracting funds from other agencies or taxing residents.

COTS’ request comes as officials weigh options for a tax measure on an upcoming ballot to help cover the city’s own increasing costs for pensions and unmet maintenance needs.

Vice Mayor Teresa Barrett said increasing the transient occupancy tax charged for stays in hotels and short term rentals could help provide funding for COTS. A 2 percent increase to the current 10 percent tax could generate $650,000 annually.

“I do believe we can make a nexus between tourism and having or not having homeless people on the streets,” she said. “I do think there would be room to do that if we passed the TOT increase.”

City Councilman Mike Healy expressed support for bridging the funding gap this year, though said it would be a “challenge” to divert TOT tax revenue away from paying down pension costs. He said the city will later this year discuss an increase in the development fees that could be used to help support COTS, and the League of California Cities is also lobbying to increase statewide funding for homeless services.

“I think there’s bit of tendency to take what COTS does in the community for granted,” he said. “If you look at what we were dealing with before COTS, it was profoundly worse. ... You had more people sleeping under bridges and doorways and we’re certainly seeing other communities in the region deal with those kinds of issues. I very much want to make sure COTS can succeed in its mission.”

Former Petaluma Police Chief Patrick Williams penned a letter to the council in support of COTS, and others, including resident Maggie Hohle, spoke Monday in favor of fully funding the nonprofit this year.

“COTS has done a beautiful job of making us all human, and not just saying if you don’t have money, you’re not human,” she said.” To me that’s the big picture coming out of COTS that I can share with my children and that makes me proud to be resident of Petaluma. If COTS is asking for some extra time, I’m sure we can give it to them.”

Johnson said the 29-year-old agency reaches 1,000 adults and children annually through its portfolio of programs. It serves 135,000 meals a year and delivers 650,000 pounds of food to community members. The nonprofit has reduced homelessness in Petaluma by 65 percent, he said.

“In the ’90s, I remember the parks and bathrooms where people took bird baths in the sink, I remember people cooking breakfast in Walnut Park,” Johnson said. “I remember dozens of people hanging out in parks and drinking beer out of paper bags and families complaining about people sleeping inside and outside of the library, camps all up and down the river in fields. ... I don’t want to see it go back to that.”