Petaluma City Council members appeared pleased – or at least relieved – with the city’s short-term financial outlook Monday during a workshop on the budget.
Petaluma City Council members on Monday agreed to put the city on a potentially long and painful — but ultimately more secure — financial track.
Petaluma’s mid-year budget review again is one of those mixed-message scenarios. The city’s general fund reserves are projected to be about $1.4 million by the end of June, which is a far rosier projection than just a few years ago when the fund had been drained to a few thousand dollars.
Petaluma is preparing a protest letter to the state in defense of $34 million, mostly in highway construction projects, that the state disqualified for funding with former redevelopment money. The most crucial at-risk plans include two highway interchange projects: at East Washington Street, which is under construction, and at Old Redwood Highway, which is ready to go out for bid.
Petaluma city leaders agreed late Monday to tighten the budget belt one more notch. In another round of cuts that trim about 5 percent from the 2012-13 general fund, the $32.5 million spending plan should maintain priority services and put the city on course to begin rebuilding a rainy day fund.
California’s pension system lowered a key estimate of future investment returns Wednesday, a move that will drive up pension costs for cities across Sonoma County and further squeeze public services. The decision will mean yet another hit to beleaguered local budgets as CalPERS jacks up pension contributions by public agencies to make up for lower investment returns.
Bill Mushallo, Petaluma’s new finance director, has been busy working on budget issues since taking the helm in Petaluma earlier this month. “It’s not easy, but we’ve got opportunities to get back on track,” he says.