The city council conducted two meetings by video conference this week. They were available to the public by broadcast on cable channel 26. Video replays are posted on the city’s website. The special meeting on April 24 focused on recovery efforts from the pandemic. The regular meeting held on April 28 focused on the 2020-21 city budget.
The purpose of the special meeting was to discuss and share concerns about possible recovery efforts. City Manager Darrin Jenkins led staff reports, followed by questions and comments from council members. Issues discussed were centered around helping small businesses in the city, using the Sonoma State University campus as an alternate medical facility, public use of the Foxtail Golf Course and how to provide more information to residents regarding these and other topics.
The hot topic was using SSU as an alternate medical facility and for sheltering the county’s homeless during the pandemic. There was some doubt whether a need for an overflow medical facility was necessary. Currently only 23 cases have required hospitalization. One student housing is to be used for quarantine of homeless that have tested positive or showed virus symptoms. Another is for sheltering at risk homeless populations required by State and County shelter-in-place orders. This also allows existing homeless shelters room for social distancing in their shelters.
Staff was directed to liaison with SSU and the Sonoma County Health Department to obtain more information, ensure communications with citizens about the use of this facility and develop an exit plan. Subsequently a press release was issued and a newspaper story was published.
Of equal concern was what could the council do to help small businesses in the city stay open. 150 are open and operating as essential businesses. Options were discussed and staff was directed to place ads in the local papers using existing funds for economic marketing. These ads will advertise what businesses are open to residents. Mayor Callinan reminded the council that the cost to help businesses stay open will be much less than the revenue lost should they go out of business permanently.
The regular meeting was dominated by budget concerns. Jenkins presented a preliminary draft but warned that given uncertainly in revenues and duration of shelter-in-place orders, the budget will require frequent revision. He said the city is doing well with cash solvency, but long-term outlook isn’t as bright. He believes we are entering an extended period of decreasing revenues and increasing expenditures. He said, “we just don’t know.” They are working with staff, stakeholders, employees and bargaining units for ways to decrease or delay expenditures. Vice Mayor Mackenzie stated he agrees with other pundits that it will take 3-5 years for full recovery.
The largest revenue sources for the city are from sales and property taxes. At 26 percent of revenue, property taxes currently look stable. However, there will be a significant impact from loss of sales taxes which accounts for 31 percent of revenues. The longer businesses are closed or at reduced operations, the more severe that impact. The Transit Occupancy Tax (Hotel Tax) accounts for 8 percent of the budget. In 2019 it was 5 million dollars. He estimates only 2.7 million, in this budget. Another impacted source of revenue is from the Graton Casino. They usually contribute 2.5-3 million dollars per quarter. Jenkins expects little funding from them in the next two quarters and perhaps into next year.
The initial budget for 2020-21 is currently forecasting 36 million in revenues and 36.1 million in expenditures. Reserves are in relatively good shape, much better than some other cities. A 100,000 drawdown will not have a great impact. However, given the uncertainty of future revenues the goal is to minimize use of reserve funds for operational expenses. The other expressed goal during this meeting is to avoid layoffs and retain full-time employees. The short-term benefits of shedding employees have long term impacts on retaining talented, qualified and competent employees. As an example, a public safety officer takes about three years to recruit, train and gain competence in all their duties.
An expressed challenge was “getting it right.” Preparing for recovery and re-opening but not so fast that later in the year a second wave of sheltering in place and business closures will be required. The council expressed thanks to Jenkins and staff for their efforts, to do the best they can, given the vast unknowns while still serving the citizens of the city and keeping essential services operating.