City uses reserves to balance budget

The Healdsburg City Council has put the final touches on next
year’s budget and expects to spend more than a half million dollars
in General Fund reserves to stay in the black.
The budget picture wasn’t quite as bad as projected a few weeks
ago though, with the deficit shrinking from just over $800,000 down
to $590,000 after Finance Director Heather Ippoliti made a few
adjustments to the budget.
“You asked us to sharpen our pencils, here’s what we came up
with,” she said. Ippoliti included grant funds in the budget and
found a few errors in calculations of payroll that added up to
about $70,000.
The downgrade of an administrative specialist position to an
office assistant in the fire department also saved an additional
$17,000.
“It was clearly a worthwhile exercise,” said Mayor Tom Chambers,
of the council’s decision to ask staff to go back and look over the
budget projections one more time.
“It made a $225,000 difference,” Ippoliti said.
During budget hearings earlier in the month, the council made it
clear that they were not interested in making deeper cuts to public
safety or city personnel after a tough round of cuts last year.
This year, the council said, they will cover the shortfall with
reserves, but are looking into potential revenue generating
measures as well.
City Manager Marjie Pettus said there are options the city could
explore to add to the city’s revenue stream, including a possible
sales tax measure, a Transient Occupancy Tax (TOT) increase or a
reallocation of TOT funds.
Other measures, including a parcel tax, an assessment district
and a utility tax aren’t favorable options according to the
councilmembers, who all said they would prefer to explore other
options first.
“I’d like to see polling (results) on a sales tax and the same
with the TOT,” said councilmember Jim Wood, who said he didn’t see
the city pursuing other assessment district or parcel tax
options.
Pettus said once the council decided what direction it would
like to take, the city would commission a poll to see what was the
most favorable option among community members.
“Once you decide what you are willing to support or get behind,
we can do some polling and test one initiative against another,”
Pettus said.
“A sales tax is going to be tough,” said councilmember Gary
Plass. “People are taxed to death right now.”
But, he said, increasing the TOT tax might make the most sense.
Then tourists would be covering more of the costs of city services,
the council said.
Currently visitors to Healdsburg pay a 12 percent tax on their
overnight hotel stays. In measures passed by the voters, 10 percent
goes to the community services fund and 2 percent to the general
fund, most of which pays for public safety.
“I like the idea of outside folks paying for our services,” said
Mayor Tom Chambers. But, he said, any of the revenue generating
measures would simply be “masking the issue” of the longterm
problems with municipal budgets.
“I still think it’s a structural deficit around benefits,” he
said.
Other adjustments were made to the general fund budget that
included adding $25,000 to pay for a tax measure poll and $9,000 to
reimburse the Future Farmers Fair board for work at the
fairgrounds.
The council also discussed a possible adjustment to the
Redevelopment Agency budget that would include an increase of
$25,000 to the promotions budget of the Chamber of Commerce for the
contract with the car dealerships.
The RDA last year decreased the overall budget for Chamber
promotions, and the additional funds would bring the dealerships
budget back to last year’s total.
The city council, acting as the board of the RDA, decided to
wait to make a final decision on the issue until the end of the
Chamber’s fiscal year, when there might be money from other
promotion budgets that could be shifted.
Kerrie Lindecker can be reached at Ke****@so********.com.