Welcome news for a change! Cotati found itself with a few extra dollars in its accounts despite the ongoing Covid-19 crisis.
The number comes out to about $1.7 million of a budget surplus for the 2019-2020 fiscal session, according to a budget update presentation at the Cotati City Council’s last meeting. This is despite a substantial decline in sales tax revenue—sales tax makes up 27 percent of the city’s annual income. Measure G is mostly to thank for the stability of the city’s budget. While restaurant, retail, and tourist sales have all fallen, Measure G sets Cotati’s sales tax percentage at 9.25 % percent, a full point higher than the standard set by Sonoma County.
Since Cotati set the tax themselves, they don’t have to share and now that little one-point bump makes up a stunning 28 percent of the city’s revenue. An adjusted budget back in June, which put the brakes on many infrastructure projects and investments in the city, combined with Measure G, helped keep Cotati afloat even as many other municipalities wrestle with multi-million-dollar shortfalls.
“Back in my day that would have been an A+,” Councilmember John Dell’Osso said.
A surplus is good, but it comes with a cost: stagnation. Many long-term infrastructure projects under consideration by the council have been placed on a hold, pending improving economic conditions.
But who knows when those days will come? Still, according to Council member Susan Harvey, it might be for the best that the city’s construction plans are on furlough. “We can’t do much in the winter anyway. If things are looking better, we can jump back in the spring,” Harvey said.
All told Cotati seems set to go into 2021 in a decent financial position. The city claims access to about $7 million between its reserve and leftovers from the 2019-2020 fiscal year. Of course, they don’t want to touch the reserves, which are at about 87 percent capacity. For comparison, the city’s expenses for this year were a little over $9 million, so, if it had to, Cotati could survive most of 2021 with no tax revenue.
That’s not exactly an event which is likely to happen, but if time is money then Cotati’s windfall has afforded the city a chance to be selective.
“We’ve seen price gouging in the past,” Harvey said. “I know it’s a fine balance with this crystal ball, but I’m hoping we can stay ahead of that since we’ve saved all this money to invest in the community.”