By MATT BROWN
THE PRESS DEMOCRAT
An improving economy, an aggressive campaign to attract new businesses and some belt tightening measures have allowed Rohnert Park officials this week to balance the city’s budget for the first time in 10 years.
But deferred maintenance and increasing pension costs could have the city back in the red by next year, leaders warned Thursday.
“It’s great news that we passed a balanced budget,” Mayor Joe Callinan said. “But we still have some unfunded liability. The outlook is that the deficit grows.”
Three years ago, staring down a $6 million budget deficit, the city declared a financial emergency and there were “whispers of bankruptcy,” according to Callinan.
Public swimming pools were closed and dozens of city jobs were cut. The private sector also was hit hard as a steady stream of companies, including State Farm Insurance, the city’s largest employer, left town.
“We decided that that’s not the route we wanted to go,” Callinan said of the bankruptcy discussions. “We worked through it.”
The city has since streamlined its permitting process and has actively sought to fill vacant commercial and industrial space. At least a dozen new businesses have located to Rohnert Park in the past year.
The city council in April approved a 1,645-unit housing development, which will add the first new homes in Rohnert Park in 24 years.
The new Green Center, a world class music venue at Sonoma State University, and the $800 million Graton Resort and Casino that opened in November just outside of the city have helped draw visitors and increase sales and hotel tax revenue, officials said.
The Federated Indians of Graton Rancheria, which owns the casino, made its first payment to Rohnert Park and Sonoma County as required in its state gaming compact.
The Gambling Control Commission on Thursday approved the $2 million payment to the city and $1.1 million to the county to offset to impacts of the casino.
The quarterly mitigation payments are based on the casino’s earnings. The gambling center had $101 million in net revenues for the first quarter.
The $98.1 million budget that the city council passed Tuesday includes $31.7 million in spending from the general fund, which pays for services including police and fire, public works and parks. The spending plan also calls for a $300,000 addition to the city’s reserves.
“We’re starting to become a strong city,” Callinan said.
But the rosy financial picture was tempered with notes of caution as the council on Tuesday also discussed a 10-year financial forecast that projects large budget deficits for most of the next decade if the current levels of revenue and spending remain the same.
At current levels, Rohnert Park is expected to have a $1.4 million deficit next year and a $4.2 million budget shortfall by 2017.
City Manager Darrin Jenkins said that the city’s pension costs are expected to increase $1.5 million per year over the next seven years.
“Rohnert Park really has done an outstanding job in exerting fiscal discipline, but we need to remain diligent,” he said. “We are not out of the woods.”
(You can reach Staff Writer Matt Brown at 521-5206 or firstname.lastname@example.org.)