Council defers decisions on city budget

With a July 1 deadline looming and the state expected to “borrow” significant city funds to solve its own budget problems, the Sonoma City Council will likely adopt a continuing operations resolution. That decision, now on the agenda for the council’s July 1 meeting, would allow the city to operate “under the status quo” while giving city management and council members more time for fact-finding.
“We do not have the facts and figures we normally have by now,” said Assistant City Manager/Treasurer Carol Giovanatto. “It’s very difficult to make projections. Nothing is concrete.”
Sacramento is eying up to 8 percent of the city’s property tax revenue, plus a cut of gas and highway taxes. Compounding that loss are forecasted drops in property taxes and sales tax (both down 5 percent) and the Transient Occupancy Tax.
Estimates of the total hit to city revenue are in the $400,000 range. But “I wouldn’t hazard a guess,” Giovanatto said. “We’ve got nothing to shoot at.”
At the city council’s second budget workshop Monday evening, council member Steve Barbose voiced the majority opinion that, given the uncertainty about the state’s plans, he was in favor of deferring the city’s final budget decision. This would “hold the line until the final decision was made,” said Giovanatto. “The city would continue operations – the status quo – with no effect on the bottom line.” She added that no new programs or major expenditures would be undertaken without the council’s approval.
The current fiscal year will end with a $133,000 deficit. The proposed 2009-10 budget assumes a 5 percent decline in revenue from property, sales and TOT taxes. “Our approach has been precautionary,” said Sonoma City Manager Linda Kelly.
Future budget decisions will consider whether to draw on the city’s Operating Reserve Fund of $1.5 million. The fund had been established to provide breathing room for the city to evaluate alternatives in the event of financial hardships.
Monday’s agenda included budget overviews for the Community Development Agency, cemetery operations, non-profit service and water operations.
The draft budget had recommended that the council not adopt any non-profit budget allocations. Last year, $165,000 was shared among the Boys and Girls Club, the Vintage House, and the Sonoma Ecology Center. Barbose and fellow council member Joanne Sanders disagreed, insisting that the allocation be returned to the proposed budget. “We’re not making any decisions now,” Barbose said. “We’ll make the hard decisions later.”
The water operations budget came under scrutiny. The 23 percent increase (adding $707,000) would fund “an aggressive water conservation program,” said City Engineer Toni Bertolero. “We have not been successful in getting the 10-15 percent demand reductions we need.”
The budget includes two major studies, a state-mandated water management plan and a water system master plan, totaling $130,000. Councilmember Joanne Sanders questioned the need and timing of the surveys. “They feel redundant,” she said. “I’m kind of planned out. We need to work through the plans we already have.”
Sanders, who will be on vacation abroad, plans to participate in the July 1 council meeting by phone, using the SVTV Channel 27 live Webcast of the event. The continuing operations resolution, as well as the final budget, can be passed with a simple majority of the five-member council. Approval to draw on the reserve fund, however, would require at least four votes.