Healdsburg budget hearings continue

There’s lots of sharpened pencils and rolled-up sleeves around
Healdsburg’s City Hall these days as staff and council members work
to draft a balanced budget for the coming fiscal year that begins
July 1.
There’s also a few empty desks, some pending farewells and an
undercurrent of fiscal uncertainty, following recent mid-year job
consolidations, retirements and continued poor tax receipts.
City Council and staff last week opened a month-long series of
public meetings on the various portions of the city’s operations,
including fire, police, community services, electric, other
utilities and several more special reserve and capital improvement
funds.
Last year, the city cut about $2 million from its basic
operating budget and dipped into reserves to counter the sluggish
economy and severe cuts in state funding support. By mid-year (this
past February) an additional $200,000 had to be cut, mostly done
with job cutbacks and cost freezes.
City budget workshops continued May 19, with additional meetings
set for May 24 and June 7. All meetings are at City Hall and pubic
testimony is allowed.
“The economic downturn continues to wreak havoc on the City’s
finance picture,” Heather Ippoliti, the city’s finance director
told the council and public Monday night. “There is no end in
sight” to the bad news about unemployment, housing foreclosures and
low tax revenues, she added.
As a starting point, a proposed $6.1 million operating budget
was presented which is $68,735 short of being balanced. This
follows several meetings and input from a Budget Task Force which
included council members Eric Ziedrich and Gary Plass, plus five
citizen volunteers.
The $6.1 million starting point represents a 16 percent
reduction from the 2008-09 $7.2 million budget. It also represents
a 4.4 percent cut from the current year’s budget which ends June
30.
Some of the most recently recommended cuts include elimination
of two police officer positions, a sergeant position and reduced
pay for an interim police chief who will take over for the retiring
chief Susan Jones after June.
Other positions being reduced or consolidated include planners
and three top positions in the fire department, including an
unfunded vacancy  for the fire chief position, following current
chief Randy Collins’ retirement next month.
More payroll and benefit savings may come after the next rounds
of public employee union negotiations are completed over the
summer, Ippoliti told the Council on Monday.
“We need all the feedback we can get,” said Ziedrich. “We need
to spread the burden and the awareness as far as we can.”
Healdsburg’s budget is no better or worse than what all local
governments and school boards currently face. The county’s Board of
Supervisors is beginning this month to wrestle with a predicted $62
million budget deficit.
Despite some spotty improvements in sales and property tax
collections, the state’s $23 billion budget crisis will continue to
have negative impacts on all local governments for a few more
years, if not longer.
Local governments, unlike the state or federal governments must
approve and operate on a balanced budget. One key to having a
balanced budget in bad fiscal years is to build fund reserves
during better years which Healdsburg has successfully done.
However, some of those reserves had to be used last year and there
is no hope to replenish those reserves in the coming year.
The city has millions in reserves in its various water, streets,
wastewater and electricity funds. But it also has millions owed in
long term debt, including $6.8 million from its operating budget in
next year alone.
The city-owned electric utility is anticipated to have total
revenues next year of $22.2 million, matched against $19 million in
direct expenses. The fund’s $3.7 million anticipated reserve is
only half the $7 million city policy requires.
“The good news is we’re not in the red,” said Council member
Gary Plass, “but our reserves are not where they need to be.”
Future budget workshops will cover the transit, airport and
Villa Chanticleer funds and budgets. The May 24 meeting is
tentatively set to cover the Community Service Fund, which
historically has supported joint programs with the Healdsburg
Chamber of Commerce, Downtown Business District and other community
organizations.
All these groups have been warned to expect as much as 50
percent or greater cuts over previous years’ funding.
This was the first year for a Budget Task Force. Other members
included Henk Peeters, Herb Lieberman, Kevin Young, Max Dunn and
Chris Manson.
Some of the task force recommendations included “privatizing” or
outright sale of the Villa Chanticleer, contracting the police
dispatch services, fewer swimming pool hours and a shorter season,
increase the transient occupancy tax with voter approval, reduce
city employees’ fully paid medical benefits and look for more job
sharing opportunities.
“We looked long and hard at everything,” said Plass.”It was very
worthwhile.”
With or without any general economic improvements, the city
faces other huge challenges looming on its horizon.
One of these is the federally-mandated wastewater treatment
plant and another is the replacement of the Badger Electric
Substation. Another challenge resides with whether the state
attempts another raid on the city’s Redevelopment Agency, where it
took $2.7 million last year.
In all, the city has a current capital project budget for $34.5
million next year. Almost all of these projects are covered by
state and federal grants or direct-use fees. How much of the actual
work on these projects gets done in 2010-2011 remains to be  seen
and will be studied during the current budget workshops.
The City Council must adopt its balanced budget before July 1,
just six weeks away.