Petaluma officials Monday voted to approve a $182.05 million budget for the fiscal year beginning July 1. The spending plan, which represents a 6.3 percent increase over last year’s budget, comes as the city is faced with the possibility of running out of money to fund its current level of service in two years.
After belt tightening throughout departments, officials staved off the harsh reality of an unbalanced budget for another year, with a $1.4 million shortfall projected in the fiscal year beginning July 1, 2019 and a $3.4 million shortfall anticipated the following year. The approval of the budget comes as the city is the midst of discussions about new revenue sources to counter that trend as it is faced with rapidly rising pension costs and has critical unfunded infrastructure needs.
This year’s budget incorporates funding for several projects to optimize facilities at the Ellis Creek Water Recycling Facility, which in total account for about $18.6 million of the $37.6 million capital budget. It will also fund a $1.5 million project to replace thousands of city streetlights with energy efficient LED lamps, as well as $1.17 million in repairs to the community center and the city’s police and fire stations.
Amid an outcry from citizens and local officials, the final budget reverses a previously proposed $70,000 funding cut to Committee on the Shelterless, the city’s main homeless service provider. At a May 8 meeting, four council members indicated a desire to temporarily continue full levels of support for the nonprofit from a pot of fees paid into by developers of major projects instead of building affordable units.
Cuts to funding requested by other nonprofits from those same developer fees, such as a $20,000 reduction to the Boys & Girls Club and a $13,175 cut to funds requested by Petaluma People Services Center remained unchanged.
Among several hires funded in the budget is a newly-created revenue collections officer, a position long envisioned by the council that will slash costs associated with retaining outside collections agencies while helping capture additional revenues, such as unpaid fees and taxes from short term rental hosts shirking city regulations, City Manager John Brown said.
“The likelihood is that the position will pay for itself and then some,” Brown said, adding that the post could be filled by November. “It will capture more revenue and give us a resource when we have a problem.”
The city will enter the upcoming fiscal year with $44.6 million in its general fund. It will have $7.4 million in its reserves — about $4 million of which is not already designated to other uses, Finance Director Bill Mushallo said.
Spending from the general fund, which pays for services like police and fire departments, is down by $167,985 from the previous budget. Salaries will decrease by $50,010, a cut attributed to a reduction of public safety overtime costs and an unpaid leave from the city attorney’s office.
The largest source of general fund revenue – roughly $28 million – comes from taxes and fees. The bulk of that figure comes from $12.5 million in sales tax, a revenue source the city is talking about asking voters to increase in the coming months.
Benefits costs will increase $448,774, the result of increased employer contributions and costs associated with new traffic safety officers approved last fiscal year and the revenue collections officer.