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City begins fiscal year with balanced budget

The 4th of July got all the hoopla, but last week marked another occasion of note – July 1, the start of the new fiscal year. Unlike last year, when Sonoma, awaiting repercussions from the state’s budget maneuvers, could not sign off on a budget until September, this year’s $11.54 million plan was approved on time.

The city council approved borrowing $264,000 from the city’s Operating Reserves to bridge a deficit and produce a balanced budget.
As adopted, the budget shows a 2.2 percent decrease from last year, when cuts of 10.1 percent were necessary. It includes no new or increased taxes to residents or visitors.

It was approved by a 3 to 2 vote.

“The budget largely retains all current year public services, and is a ‘hold the line’ budget with contractions in expenses wherever possible,” City Manager Linda Kelly told the council. “We still are essentially operating in a period of expenditure reduction.”
Cuts of some $700,000 made to the prior, 09/10 budget, including staff vacancies and reduction of hours, have been carried over. Out of necessity, Kelly said, “our organization has transitioned to a ‘new normal’ operating mode, focused on maximizing efficiencies, cross-utilization of staff, and rethinking ways of doing business.”

One reason the budget gap was so narrow was the city’s cautious revenue forecasting, which projected flat (property and hotel room tax) or decreased (sales tax) income. As a result, the 2010-11 revenue budget basically rolls forward the levels and reduced percentages reflected in the current year’s budget.

“On the revenue side, while we see some glimmers of recovery, we have planned for essentially no growth,” Kelly said.
The budget restores full contributions to the city’s internal services funds, including those for Long-term Building Maintenance, Vehicle Replacement and Management Information Systems, some of which were reduced last year to help bridge an initial budget deficit of over $800,000.

One category seeing an increase, from $110,000 to $140,000 was the “Tier 1” non-profit organizations. Council policy dictates that without its own parks and recreation department, the city should support organizations that provide similar services.
Receiving their requested funding amounts, in a series of separate votes, were: the Boys and Girls Club ($58,000); Vintage House Senior Center ($30,000); Sonoma Ecology Center ($22,000) and the Sonoma Community Center ($30,000).

Though complimentary of the groups’ work, Councilmember Joanne Sanders was generally opposed to funding them, at least at the requested levels. “We are in the red,” she said. “We’re asking all departments to share the pain… yet requests remain the same.”
Mayor Steve Barbose countered that the non-profits have made significant cuts in their own interior budgets. “There’s no fat to be cut,” he said. “This is a life raft we’re throwing them.”

The non-profit funding element, discussion of which dominated the June 23 meeting, was supported by a 3-2 majority, which included Counclimembers Laurie Gallian and Ken Brown.

The city budget also set aside $10,000 to essentially rent the Veterans Building for 20 days of the year, then donate those dates for use as non-profit fundraisers. Examples include annual events presented by, among many others, Native Sons of the Golden West, Vintage Festival, American Legion and Hispanic Sonoma.

“This is a huge benefit for non-profits,” Gallian said. “It really helps mitigate event costs. In the world of non-profits, it’s a big deal.”
The entire budget was approved with a 3 to 2 vote, with Sanders and Sebastiani voting in the minority.

Kelly summarized the budget as a relative success. “Overall I feel we have had a successful strategy in weathering the economic downturn with far less pain than some other communities have experienced.”