Santa Rosa passed a no-growth budget Tuesday that some council members praised as evidence the city’s finances are on the mend and others lambasted as failing to solve the city’s long-term financial woes.
A modest increase in sales tax revenue combined with employee concessions helped the city build a $117 million general fund budget that despite being the same size as this year finds room to add $1.2 million to the police department and socks away $1.4 million for a rainy day.
Several council members expressed relief that revenues have staBartleybilized and deep budget cuts of prior years appear to be a thing of the past.
“It’s a good budget. It’s refreshing not to be looking at doom and gloom,” said Councilman Scott Bartley.
But other council members expressed disappointment the city isn’t doing more to prepare for the day when Measure P, the quarter-cent sales tax for core services, sunsets in six years.
“For all the talk we’ve heard about long-term budgeting, I see nothing about that in this budget,” said Councilman Gary Wysocky, the only member of the council to vote against the budget, which passed on a 6-1 vote.
The total city budget of $311.5 million, which begins July 1, is $4 million lower than the current budget and the lowest in more than five years. Much of the $4 million drop is attributable to the loss of the city’s redevelopment agency.
City Manager Kathy Millison outlined many of the cost-saving efforts the city has taken that should help for years to come. For example, the city just refinanced just over $60 million in wastewater debt at a lower interest rate of 3.9 percent. In the process, one of the city’s bond ratings was increased, a vote of confidence in its improved finances.
“We went from a stable condition to a more positive position. That was pretty significant,” Millison said.
The city also will eventually see lower employee costs in coming years, she said. The two-tiered pension system that imposed less generous benefits on new workers should, over the next eight years, affect 300 to 500 new workers, she said.
She called it a credit to Santa Rosa that the city was able to negotiate pension changes cooperatively with employees instead of adversarially in court or at the ballot box.
“We’re not done. We want to make that very clear,” Millison said. “Our employees are well aware that our next discussion is going to be about cost-sharing.”
The city expects to have just under 1,200 full-time employees next year, the same as this year but well below the 1,382 it employed four years ago.
More difficult decisions lie ahead, however. Millison cited Tuesday night’s decision not to spend money to fix up the city building that is home to local food bank FISH – Friends in Service Here.
“Unfortunately, I think that’s a preview of the kinds of tough choices that you’re going to be dealing with for quite a while now because everything in this budget is about a choice,” she said.
The general fund budget is projected to be flat, up from $116.6 to $116.9 million. Revenues, however, are expected to increase by $2 million, up from $117.9 million to $119.8 million next year.
That should allow the city to add $1.4 million to reserves, bringing them up to $16.9 million or 14.5 percent of the general fund. That’s close to the 15 percent reserve goal for emergencies.
The police department’s budget is increasing 1 percent, to $36.6 million. The increase of $1.2 million is the biggest boost of any department in the city. Most departments remain unchanged.
Millison said there were several reasons for optimism that the local economy would improve.
She cited the eventual arrival of the SMART train and the Sonoma County airport expansion as two major projects that could boost the economy. Some new housing projects are showing signs of life, as well as the arrival of several new businesses in key shopping districts.
“All of this is good news for our local and regional economy, and it can only mean positive things on the revenue side for the city,” Millison said.
Much of the meeting involved debate over two issues that ultimately were resolved without changes to the proposed budget.
Councilman Jake Ours proposed boosting the city’s neighborhood revitalization program by $35,000 or more by diverting money set aside by the Community Advisory Board for future neighborhood projects. This was denounced by neighborhood activist and city council candidate Julie Combs as “raiding CAB’s rainy day fund.”
The council agreed that it was such a small amount of money that the city could fund the program later out of reserves.
The other issue involved whether to add money to the parks department budget to do a better job of keeping restrooms clean and garbage emptied in city parks. The debate flared after a Rincon Valley resident sent an email to the entire council complaining about the bathrooms in Rincon Valley Community Park being regularly locked in the morning, out of toilet paper on weekends, and having garbage bins uncollected.
Marc Richardson, director of the recreation and parks department, said his department doesn’t have the staff to deal with those issues.
Councilwoman Susan Gorin pushed for additional funding for parks to deal with such issues.
“The public supported Measure P and I think this I part of our basic level of services that they expect from the city.” Gorin said.
But others council members worried about making a budget decision based on one email, and agreed to revisit the issue of the department’s needs later.
As part of the budget, the council increased two sets of fees.
It passed modest fee increases at the Bennett Valley Golf Course to increase reserves, which have fallen below targets due to declining usage. Most green fees, with the exception of those for juniors, will increase by $1, to a maximum of $38 for 18 holes on a weekend. Annual passes for seniors will also go up about 3 percent.
The council also approved an increase in parking fines of between $2 and $60. Expired meter fines, the most common, would increase the least, from $33 to $35. More serious violations, such as parking in front of a fire hydrant, would rise from $33 to $70. And the worst offense, such as parking in a bus stop or blocking wheelchair access to sidewalks, would increase the most, from $263 to $350 each.
The city hasn’t increased its parking fines 2002, except to offset state surcharges, which currently stand at $12.50 of every parking ticket the city issues. City staff noted the city’s fines are lower than other jurisdictions in the county. Several council members didn’t hesitate to increase the fees given that the flagrant violations were seeing the steepest increases.
“Frankly if they are scofflaws like that they deserve a significant fine,” Bartley said.
Mayor Ernesto Olivares congratulated city staff and urged critics to be more optimistic about the city’s improving financial picture.
“I’m not going to run around saying the sky is falling, Olivares said. “It’s not. I think we’re making some slow progress.”