The City of Cotati completed months of budget planning meetings with staff and the public at their regular meeting June 8, passing a resolution to adopt the budget for the fiscal year beginning in 2021 and ending in 2022.
Total operating revenues were budgeted at $10.8 million. An increase in revenue compared to 2020-2021 is primarily due to a $1.4 million grant in one-time federal funding from the American Recovery Act. Adjusting for the federal grant, the $9.4 million total is actually $360,000 or 3.7 percent lower than the estimated actual for fiscal year 2020/21—a decrease the budget document attributes to a decrease in development fees as the Kessing Ranch housing development nears completion.
Total operating expenses for 2021-22 are budgeted at $8.5 million This amount marks an 11-percent increase over the 2020-21 budget, primarily associated with increased staffing costs (worker’s comp insurance, health benefits, pensions) and increased liability insurance.
The 2021-2022 budget marks the thirteenth balanced budget in a row. The budget identified four broad goals for this year’s budget: economic vitality, community service, community engagement, and inclusion and equity.
In a letter accompanying the budget and addressed to the council and community, City Manager Damien O’Bid said, “The adopted fiscal year 2021-22 General Fund budget was prepared using a conservative approach. City staff continues to be cautious and responsible in developing a budget that maintains service levels, while continuing to strategically fund projects focused on the maintenance or improved economic vitality of Cotati.”
He states that department directors were instructed to prepare their departmental budgets with potential savings in mind to keep operational expenses flat. Departmental budget reviews focused on the Council’s goals and priorities in addition to departmental needs.
Even as the city looks forward to a probable increase in fiscal security coming out of the pandemic, it must also deal with increased costs associated with materials and insurance.
“We need to stay cognizant of those trends, remain nimble, and make pragmatic decisions accordingly as the actual impacts become known, while remaining fiscally prudent and maintaining core services. While we are focused on keeping our community safe and continuing our essential municipal services during this time; we are also focused on the future with this budget, looking toward a robust recovery plan for our city and continuing to move forward on city council priorities,” the letter reads.
A summary of the budget included in the staff report highlights that the General Fund maintains a reserve in excess of 25 percent of operating expenses, and water and sewage funds in excess of 33 percent of operating expenditures.
Total projected revenue sources include $2 million in property taxes, up 9-percent from last year, and $5.6 million in sales taxes. $630,300 from taxes on cannabis businesses operating in the city limits.
The budget also included some up-to-date economic data on the residents of Cotati. The population, down slightly since 2018, was 7,454, with 2,758 households. 46 percent of households were families, nine percent married couples, four percent single people not designated as seniors living alone, and 17 percent were seniors living alone. Median household income was $82,182.
Forty-three percent of Cotati residents rent, while 57 percent own a home, with the 2019 median home value being $525,500.
The council also approved a commercial cannabis permit for Cotati business Drops Cali to manufacture and distribute edible cannabis products out of its location on Alder Avenue.
In November 2017, Cotati residents approved a ballot measure (Measure G) which levies taxes on cannabis businesses operating within Cotati city limits. Taxes are broken down by type of operation. Cultivators are taxed two percent of gross receipts or $5 per square foot of cultivation area, manufacturing one percent of gross receipts and retail (excepting medical sales) at three percent of gross receipts. Distribution is not taxed.
Per the 2021-22 budget approved at the meeting, the revenue from taxes on cannabis businesses operating in the city limits was $630,300.