The City of Sonoma needs to get serious about its budget. Even though the voters recently approved a ½ percentage increase in the city’s sales tax, the $3 million it may produce will do little more than fill the $2.8 million General Fund budget deficit. That’s good, but we think the city needs to do much more.
Recently, the City Council approved a ten-year extension of the Tourism Improvement District (TID), which requires lodgings within the city limits to assess a two percent fee on guest room charges. This money, amounting to roughly $1 million each year, must be used by the TID for promotional purposes only, i.e.: advertising and public relations. The logic for the renewal was that the TID helps boost room occupancy, which in turn boosts the city’s Transient Occupancy Tax (TOT) revenue. However, to equal $1 million, the TOT revenue would have to increase by a whopping 50 percent, which frankly is not going to happen any time soon.
This analysis of the TID renewal indicates that the city missed a major opportunity to quickly boost its own finances. Why two percent instead of one? Why ten years instead of five? The point is that the City of Sonoma has a serious financial problem and solving it will require serious solutions.
Seventy-five percent of the City’s budget is personnel costs and benefits, like pensions. If there’s money to be saved, it must include reducing staff costs, yet in recent years staff positions have increased, not decreased. The city has added Assistant City Manager and Assistant City Clerk positions, and a Cemeteries Manager. No doubt having these positions is helpful, but they also may be more than the city can afford.
If any new staff position makes sense, it’s hiring a Grants Manager whose job it would be to research grant opportunities and develop grant proposals. There are literally billions of dollars available in federal and state grants every year and there’s no reason why the City of Sonoma can’t have a share of them. Moreover, an effective Grants Manager should easily be able to cover their own cost to the city.
The revenue side of the budget equation is more challenging. The city cannot simply snap its fingers and generate new revenues; an increase in income must be part of a well-reasoned and evaluated strategy. Depending upon tourist dollars alone does not guarantee a solid financial future, nor can the city rely on major growth in sales tax income.
Unless things change, our General Fund will be back in a deficit position within a few years. Municipal finance must comply with government regulations, but balancing the budget is not rocket science; the city’s expenses are growing faster than its income, something every householder must reckon with.
The community wants improvements: more affordable housing, more activities for kids and families, more trees, more pedestrian and bicyclist safety, and more public serving facilities like a community recreation center, for example. These all take money and none of them can happen unless the city gets its finances in better order.
Kicking the financial can down the road just postpones the inevitable reckoning. It’s long past time for the City Council and administrative staff to get serious and make solving the city’s financial problem its highest priority.
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