With roads, you get what you pay for

For the last 20 years, Petaluma has held the dubious distinction of having the worst roads in the entire Bay Area. The most recent report by the Metropolitan Transportation Commission ranked the city’s Pavement Condition Index a dismal “Poor/Failed.” Today, only Larkspur has worse roads than Petaluma.

When she was appointed as Petaluma’s new city manager eight months ago, Peggy Flynn received a mandate from the City Council to fix the roads problem and other longstanding fiscal woes, all of which stem from limited tax revenues coupled with skyrocketing pension costs.

To do that, Flynn told me last week that she first plans to launch an unprecedented community outreach effort aimed at sharing important fiscal information with community members at workshops where she also hopes to elicit valuable public feedback on “what kind of a community we want to be.”

Presumably, it’s not a community where the roads are perpetually potholed.

“We needed to have this conversation many years ago,” says Flynn. “I want to demystify the municipal finance picture which is complex as heck.”

Public workshops on revenues, pensions, staffing, facilities are all being planned with online tools to enable citizens to become more astute about where the money comes from to fund city services and how it’s all spent.

Acknowledging it’s a tall order to get people to attend such events, Flynn says she’s encouraged by the huge level of public engagement earlier this year when the city council opened up its annual goal-setting session to the public. As a result, a comprehensive set of goals and priorities was adopted for the next two fiscal years that appears to reflect general community concerns.

One of those priorities, perhaps the single most important one, is to identify “potential revenue sources” for fixing roads, upgrading parks and restoring public safety staffing levels to ensure prompt police and fire response times during emergencies. Flynn firmly believes that if more people understand the realities of the city’s municipal finance picture, the more likely they are to support a possible sales tax increase that has been discussed for many years.

Unlike most cities in Sonoma County, Petaluma currently has no dedicated sales tax to fund city services. Rohnert Park, Healdsburg and Sonoma each have a half cent sales tax dedicated to fund city services, while Santa Rosa and Sebastopol each have a three-quarter cent sales tax. Cotati has a one-cent sales tax.

In 2014, voters here rejected a proposed sales tax increase to fund city services amidst a shameless anti-tax campaign engineered by Petaluma’s former mayor, David Glass, who cleverly donned the false role of fiscal champion to win a tough re-election campaign.

Today, the city’s fiscal reality is considerably worse. Unless a new revenue source is established, city officials project that a $1.9 million deficit at the end of fiscal year 2022 will balloon to $16.3 million by 2025, principally due to mandatory increases in public employee pension costs. Like most cities in California, Petaluma is tied to CalPERS, the public employee retirement fund which one city council member has aptly described as “like being strapped onto a roller coaster and you can’t get off the thing.”

Educating voters on exactly why that is will be crucial for winning public support for any sales tax increase. Escalating public pensions costs have, in fact, severely hampered cities’ ability to provide adequate public services. But unless and until the courts or the State of California addresses the problem, cities like Petaluma are along for the CalPERS roller coaster ride.

For more than a decade, Petaluma has been surviving on austerity measures. The frugality was largely dictated by the Great Recession which resulted in the loss of 17 police officers, a backlog of deferred maintenance on city facilities (including a fire station built in 1932) and ever-worsening roads and public parks.

Petaluma has since exhausted its pension reform options, having asked employees to pay a greater share into the benefit pool while offering newer employees a lower tier pension plan. As a result, salaries for Petaluma employees are generally lower than those in neighboring cities and counties, which has led some employees to leave for higher-paying jobs elsewhere.

The options for finding new ways to spend less on city services has been similarly depleted. That is, unless Petaluma residents want to live in a less safe community with terrible roads in perpetuity. I don’t think they do.

As plans move ahead to gauge public support for some type of citywide sales tax measure, which will likely to be placed on the November, 2020 ballot, officials like Flynn will need to keep in mind the certainty that it would be competing with other tax measures, including the renewal of a countywide quarter-cent roads tax that previously funded Highway 101 expansion but would instead direct future proceeds to road maintenance. Several expensive state bond measures are also expected to be on next November’s ballot.

Ultimately, it will be up to Petaluma’s electorate to learn the hard facts about the city’s severe financial limitations and determine whether an investment is warranted.

(John Burns is former publisher of the Petaluma Argus-Courier. He can be reached at john.burns@arguscourier.com.)