At the midpoint in its fiscal year, Sonoma has a $82,500 budget deficit, but officials aren’t worried – yet.
“We are in the red, but not overly concerned,” Carol Giovanatto, the assistant city manager and finance director, told the Budget Committee this week.
“My overall mantra is,” Giovanatto said, “the glass is half full and the glass is half empty. The good news is that our large revenue sources are at or near the 50 percent level at the half-year point.”
The empty half? The budget projections for the rest of the year already presume current budget cuts and a hiring freeze. There may be nothing left to cut if revenues from any of the major revenue streams – sales tax, property tax and the Transient Occupancy Tax – come in under plan.
The midyear general fund deficit, the first in five years, is about 10 percent of what the city faced last summer. It balanced that budget by slashing overhead, maintaining staff vacancies, cutting funding to non-profits and the visitors bureau and altering transfers into other city funds, among other maneuvers.
Those options will not be available when formulation of the 2010-2011 budget begins in May. The city does, however, have sizeable funds in three dedicated reserve funds.
Kelly said she has asked all department heads to think creatively about revenue sources and places to cut. But, she said, “You come to a breaking point. Staff is at capacity.”
The increased workload for city employees is beginning to take its toll. “You can’t continue to expect timeliness and accuracy,” she said.
“Everyone is overwhelmed,” said Trent Hudson, a public works department employee who sits on the budget committee.
The work necessitated by directives from the city council and its various commissions are hidden hours that add up to a large expense, Kelly said.
Hudson pointed to the upcoming Arbor Day activities as one example. Unarguably a fine cause, the city’s passive sponsorship will nonetheless have a labor-intensive impact on the bottom line.
Likewise an unintended consequence of the recent Cittaslow designation is that the city, not the local Cittaslow committee, is the partner. Kelly said the resulting demands on staff time for reports and meetings are substantial.
Committee and City Council member Joanne Sanders said “I admit we have no idea of the implications when we make those kind of directives to staff.” As that includes meetings of the council’s various commissions, she continued, “In times like these I think it’s acceptable to cut back commission meetings. We’ve got to do more with less.”
The committee will take up that topic at its next meeting, along with revenue-generating ideas such as parking meters on and around the plaza. With expenses cut to the bone, increasing proceeds will become increasingly important.
“We’ve gone as far as we can with cuts to staff,” Sanders said. “We’ve squeezed that towel dry.”