The Sebastopol City Council held the first public hearing on the proposed budget for the 2021-2022 budget year at its regular meeting June 15.
The first public hearing had originally been scheduled for the June 1 meeting, with the council expected to adopt the budget at the June 15 meeting, however, the first hearing was continued to this week’s meeting, with adoption expected at the June 30 meeting.
Administrative Services Director Ana Kwong provided an overview of the proposed budget, which was assembled in coordination with the council’s budget subcommittee. The subcommittee met with each city department to review their budget proposals and question particular expenditures over the course of the past few months prior to drafting the proposed budget.
The projected revenues for the proposed 2021/22 budget were $9,891,600 with 40 percent from sales tax, 29 percent from property tax, seven percent from use tax, and the remainder from various sources such as licenses and permits, transient occupancy tax and charges for services.
Total expenditures for the proposed budget amount to $11,144,841. Of that, by far the most expensive expenditure is the police department, which amounts to 47 percent of the budget (or $5,128,700). The next most expensive departments are fire and public works, each accounting for 11 percent of expenditures.
The deficit will be funded with unassigned money from the general reserve fund. The reserve amounts will not drop below the 15 percent of revenue required by the city, dropping from about $7.8 million to $6.7 million to compensate for the deficit. The city recently received $1.4 million in federal and county funds for coronavirus, which will help to offset the drops in revenue, but which will be paid out over the next three years.
With policing is under the microscope nationwide, the City of Sebastopol recently hired Jerry Threet, the lawyer who founded the Independent Office of Law Enforcement Review and Outreach (IOLERO) to oversee the Sonoma County Sheriff’s Office, to conduct an audit of the Sebastopol Police Department. The audit, which was concluded earlier this month, will be discussed at an upcoming meeting June 17.
Police spending has decreased by 0.6 percent over the last budget cycle, with fire protection services increasing by 12.1 percent, partly due to the proposed purchase of a new wildland fire engine for usage by Sebastopol firefighters while helping CalFire battle area wildfires.
According to Mayor Una Glass, who serves on the budget subcommittee alongside Councilmember Neysa Hinton, should the council need for time to deliberate on what will be a deficit budget, the adoption can be continued again from the June 30 meeting and into July.
Glass acknowledged that this past year was a difficult year, and although the city will face a budget deficit of $1.25 million, the City of Sebastopol is not in dire straits because of fiscal prudence in the past. In fact, the past year and a half of reductions in sales tax and other revenue sources caused by the pandemic are exactly the sort of situation for which the city planned.
“This year was a little weird. People probably noticed that this past year was a little weird. Our revenue has really changed, and we’ve had a lot of emergencies, special expenses. We’re just starting to emerge from an emergency, so we have a lot of special initiatives that have been proposed by colleagues to address some of these matters as we reopen,” Glass said.
“We are not broke. We have been prudent and have created these savings accounts for a rainy day. And this past year does constitute a rainy day.”
In May, council members met for a special meeting to discuss budget priorities. After police and fire services, Mayor Glass identified addressing homelessness as the third priority for council initiatives this year. By contracting with social services providers such as West County Community Services, the city will be able to save by reducing the strain on the police department while also providing services to homeless Sebastopol residents from agencies better equipped to help them. Glass said this would also increase sales tax revenues for use by the community by reducing the impact on businesses.
Other priorities were funding the marketing initiative Relaunch Sebastopol, with the hopes of increasing economic activity, and hiring financial consultants to help the city, among other things, better manage reserve funds and increase revenue flows.