|Cotati produces fourth straight balanced budget
The City of Cotati, for the fourth consecutive year, will submit a balanced budget for fiscal year 2013-14.
Although things currently appear rosy for Cotati, there are ominous signs for its financial future. By the end of the decade, Cotati could be knee-deep in financial woes.
The approval of Measure A (a half-cent sales tax) by voters in 2010 has been credited as a major factor in helping the city balance its books. Other contributing elements included city staff reductions, concessions by city employees and second-tier pensions.
Measure A, however, expires after 2015, which could bring about a budget deficit of $1 million in 2016. That figure will rise to $5 million in 2018 if other sources of revenue are not found. It would not be out or the realm of possibility for a ballot measure in the 2016 election to continue the half-cent sales tax. Also, Cotati could find some relief if the overall economy, which is showing signs of bouncing back, continues to pick up steam.
“If you look at the city’s budget this year or next year, things look fine and the budget continues to be in balance,” Cotati Mayor Mark Landman said. “But if you look further down the road, with the changes in state funding and the city’s half-cent sales tax sunsetting in 2015, expenditures begin to exceed our revenues. Even with minimum staffing levels and no salary increases, ongoing medical and retirement costs are projected to increase at a higher rate than revenues, creating a structural deficit.”
Revenues in the proposed 2013-14 budget, according to the city’s General Fund operating summary, are expected to be $4,623,000 and the city expects a surplus of $66,861 after operating expenditures. The projected general fund net balance for fiscal year 2013-14 is expected to be $1,283,992.
Budget impacts because of the state’s dissolution of redevelopment agencies have so far been absorbed by the General Fund.
“The funding model for cities has changed and will continue to change,” City Manager Dianne Thompson said. “With the dissolution of redevelopment, and the state continuing to shift more economic burden to cities, we need to rethink how local government is funded.”
A special city council meeting was held on Wednesday, June 5, for a study session of the city’s proposed budget for fiscal year 2013-14.