The Sebastopol City Council at their Oct. 14 meeting discussed the city’s amended budget to address the $2.1 million shortfall opened in the wake of Covid-19.
The tone for the five-hour meeting was muted, professional, as the council slowly came to terms with a 14 percent drop in revenue since the 2019 fiscal year, almost entirely due to the effects brought by the pandemic--one million of which is thanks to a drop in sales tax revenue. It’s a shortfall reminiscent of the 2008 financial crash. In the wake of that financial crisis, budgets across Sonoma County experienced massive drops in revenue, driving many into deficit, and thanks to that collapse, many municipalities built up their reserve funds for just this sort of eventuality.
Sebastopol is no different. That’s where the city hopes to draw from to cover this deficit. But Sebastopol Administrative, Director Ana Kwong, began the meeting with a rather sobering analysis of Sebastopol’s situation.
“What is the city facing? Obviously an unbalanced budget. Running out of cash? Not yet, but we will if we keep going at the pace we’re going,” Kwong said.
At the dawn of 2020 Sebastopol’s rainy-day fund sat at 29.8 percent capacity. The city expects that number to drop to 22.4 percent by the end of June and that’s with the revised budget. Sebastopol is deficit spending—they have to, really. With only 8.6 million in revenue, and with the revised budget at 10.8 million in expenditure, there’s not a lot of meaningful places to quickly cut. With the exception of a new civil engineer position approved by the council at their first Oct. meeting, the city has almost entirely halted new hiring, large equipment replacement, or civil projects. Now everything’s about maintenance, weathering the Covid-19 storm.
The beast in the room was the Sebastopol’s police budget, taking over half of the city’s total revenue. It is, by far, at $5 million a year, the city’s largest expenditure on its general fund, seconded only by fire protective services at $1.1 million.
That’s not an unusual distribution. Most municipalities have a similar layout--it’s expensive to run emergency services. It is, however, unusual to see a 4.6 percent, or $212 thousand, increase in the police’s budget while a city is deficit spending. This increase is mostly due to renovating the department’s security and intercom system, meeting state requirements for patrol vehicles and in a surprising twist and nod towards the Black Lives Matter protests of last summer, $25 thousand for a new mental health consultant.
Fire services also saw a 7.8 percent jump in their yearly funding, or $86 thousand, but the city claims that spike is really a readjustment, a reflection of actual expenditures. That and a better fire map of the city. In fact, according to the council, California’s annual, seminal disasters might actually be an exciting new source of revenue.
Every year Sebastopol loans a couple of their engines to Cal Fire to fight blazes elsewhere in the state. For the period of the rental, Cal Fire covers maintenance costs, wages and a rental fee. At $2 thousand a day that rental fee isn’t small, either and the engines could be gone for weeks at a time. Sebastopol Fire estimates the income from their yearly rentals to land between $100 and $125 thousand.
Traditionally that money buries itself nice and quiet-like in the general fund, but this year Sebastopol Fire hopes the money can go towards a replacement engine for one of their aging units. Bought used in the nineties and without air-conditioning, the machine is badly in need of replacement. Of course the council agreed to discuss setting aside the cash, but they balked at the half million price tag for a new machine.
“I don’t think we’re going to be able to afford a new vehicle, but I’d like us to be looking for a used one,” Councilmember Neysa Hinton said.