Budget Reductions
CITY COUNCIL STUDY SESSION
APRIL 15, 2025
ALAN ALTON, CHIEF FINANCIAL OFFICER
VERONICA CONNER, BUDGET MANAGER
SCOTT WAGNER, DEPUTY DIRECTOR
Agenda
2 Forecast Validation
General Fund Condition
Department Reductions
Public Safety
GF Forecast Validation and Budget
Process Review
City hired third party to conduct an independent evaluation of GF Forecast and annual budget process
Forecast was seen as a best practice for an advanced
forecasting model
Revenue Estimate, specifically Sales Tax, noted as too optimistic Budget process does not challenge staffing and maintains status quo by default
Redesign budget infrastructure to focus on programs rather than object codes
Lengthen budget process for more analytical submissions 3 General Fund Condition
4 General Fund Long-Range Financial
Forecast (in $ millions)
5 6
Bradley Burnes Sales Tax:
Estimate vs. Actual
General Fund Reserves
Financial Stability Reserves (FSR)
Created by City Council with $27.3M of PG&E settlement funding with specific use to address deficits
Mandated Reserves
15% - 17% of operating expenditures per City Council Reserve Policy Available Reserves
Amount over 17% City Council mandated Reserves
$9.2M added in FY2025 from City Council redirected PG&E settlement funds
7 Reserves Projection
8 9
Investment Fund Overview
The City's investment portfolio contains $590.8M in cash and investments $137.0M (23%) is General Fund while $453.8M is from restricted funds (Santa Rosa Water, Special Revenue Funds CIP like Gas Tax) All Cash and investments are used as "sources of funding" when calculating the General Fund's reserves
No difference between cash, bonds or notes
What makes up the $137.0M in General Fund cash and investments? Budgeted General Fund CIP Projects
General Fund Reserves
Payments for contracts
Cash operating needs to run payroll, AP etc.
Department Reductions
10 11
Budget Guidelines & Development
Departments identified reductions and related impacts equaling 7% of General Fund operating budget (later grew to 8%)
Maintain core services
Streamline and find efficiencies where possible
City Manager reviewed proposals and made recommendations for items to moved forward based on:
Impact to core services
Impact to the community
Prior department cuts
Ability to outsource/ revenue offsets
Proposed Administration & Operational
Department Reductions – FY 2025-26
12 Dept 2025-26 Proposed
Budget 8% Target FY 2024-25
Reductions
FY 2025-26
Proposed
Reductions
City Manager 3,163,274 253,062 359,900 485,000
City Attorney 4,593,236 367,459 2,500 293,550
HR/Risk 4,642,756 371,420 202,435 -
Finance 8,003,655 640,292 10,000 1,744,902
Planning & Econ Development 17,503,262 1,400,261 457,590 1,052,600 Recreation & Parks 17,120,134 1,369,611 375,000 550,000 Transportation & Public Works 25,753,151 2,060,252 1,191,605 687,000 Comms & Intergovt. Relations 1,819,748 145,580 211,368 233,000 Total 82,599,216 6,607,937 2,810,398 5,046,052
Proposed Administrative & Operational Reductions
– FY 2025-26
13 Dept. Position Amount Impact
CMO Professional Services $60,000 Reduce CMO's ability to respond to unexpected and unplanned staffing and administrative needs.
CMO 1.0 FTE ** $425,000
CAO 1.0 FTE Legal Secretary
(vacant)
$118,000 No substantial impact on the delivery of legal services due to process improvements.
CAO Professional Services $175,550
This would reduce the CAO professional services
budget to 68% of its FY24-25 level and would result in
a substantial reduction in the scope of legal services, increased delays in delivery and projects, limited ability to provide specialized advice, potential increase in legal risk, and potential further attrition in the CAO.
Finance 2.0 FTE ** $200,000 Outsourcing program to consultants.
Finance PEMHCA Trust $1,544,902 PEMHCA trust can gain fully funded status; will take longer without general fund contribution.
FY 2025-26 Reductions (cont.)
14 Dept. Position Amount Impact
PED SRTBIA Funding for ED
Positions
87,000 No impact; Economic Development Staff can charge out time to the SRTBIA fund and reduce General Fund
costs
PED Eliminate Chamber
Contract & add 1.0 FTE
Arts & Events Specialist
$100,000 No impact; Adding 1.0 FTE Arts & Events Specialist 100% funded by SRTBIA and Art fund and will perform
work previously done by the Chamber contract.
PED Admin Hearing Revenue $95,000 No impact; 50% of 1.0 Code Enforcement Officer can charge time to Admin Hearing fund.
PED Professional Services $100,000 Limits Department's ability to respond to increases in workload in the event of staff vacancies or high permit totals.
FY 2025-26 Reductions (cont.)
15 Dept. Position Amount Impact
PED 1.0 FTE Admin Secretary
(vacant)
$113,000 Reduce ability to respond to live calls and emails; burdens other staff with administrative duties
and mandated PRAs.
PED 1.0 FTE Civil Engineer Tech
III (vacant)
$160,000 Eliminate vacant position; underfill future retirement with CET III. May increase permit turnaround times for
Engineering applications during high permit loads
PED CET III Underfill (see
above)
$40,000 Minimal impact due to process improvements
PED 1.0 FTE ** $150,000
PED 1.0 FTE ** $110,000 Position will be eliminated January 1, 2026 PED Planning Salary
Reimbursements
$97,600 Planning time for Environmental Review and Tribal Liaison will be reimbursed by CIP projects.
FY 2025-26 Reductions (cont.)
16 Dept. Position Amount Impact
R&P 2.0 FTE ** $550,000
TPW Restructure Zero Waste
Program
$240,000 Responsibilities of contract management can be moved to alternative team; reduce support for
additional events and public engagement.
TPW 2.0 FTE ** 447,000
CIRO 1.0 FTE ** 185,000
CIRO Services & Supplies $48,000 No impact; adjusting budget to match needs of operations.
Total $5,046,052
17 Housing & Community Services –
General Fund $161,000
Contract Amount
Legal Aid Sonoma County $111,000
Secure Families Collaborative $50,000
Total $161,000
18 Homeless Services: $5,979,380
Contract/ Service Amount
Sam Jones Hall $2,128,742
Safe Parking $1,000,000
Homeless Services Admin $960,188
CIRO/ Media staff time $95,000
HOST $1,035,450
YWCA $50,000
Caritas Family Center & Drop-
In/ Warming Center $250,000
Keep People Housed Sonoma $400,000
Seasons of Sharing $60,000
Total $5,979,380
Funding Source Amount
Real Property Transfer Tax $1,050,000
General Fund $3,189,280
Encampment Resolution
Funding Grant $500,000
Other Revenue (County,
Private Contributions, etc.) $740,100
Total $5,479,380
*$500K Shortfall
19 InRESPONSE and Safe Parking
InRESPONSE: ~$3.2M/ year annual cost
Safe Parking: $1M/ year annual cost
ARPA funds fully expended
No permanent funding source identified
Furloughs: $1.4M Annual Savings
$1,379,600 General Fund Savings for 80-hour annual furlough ◦ Equates to a 3.85% reduction in pay
◦ Temporary; would last 2-5 years
◦ Excludes Public Safety and Unit 17 (Attorneys)
◦ Options include closing campus over holidays, or allowing staff to flex mandatory time off
20 Budget Reduction Summary - $6.7M
Administrative/ Operational Department Reductions - $5.1M ◦ 14.0 FTES Eliminated (10.0 Filled, 4.0 Vacant)
◦ Addition of 1.0 FTE funded by Special Revenue Funds
Housing & Community Services - $161K
◦ Legal Aid & Secure Families Collaborative Contracts
Mandatory Furloughs - $1.4M
21 $6.7M In Reductions:
Long-Range Financial Forecast (in $ millions)
22 Reserves Projection- $6.7M Reduction
Administrative / Operational
23 Public Safety
24 Baseline Public Safety Funding -
Maintenance of Effort
Through the voter approved Public Safety and Prevention Sales Tax Measure of 2016, the City is required to maintain a minimum level of funding based on budgets for police and fire programs at that time
Minimum funding based on budgets at that time
Police 34.3%
Fire 23.7%
FY 2025/26 General Fund without proposed reductions
Police 36.9%, $5,933,000 over baseline
Fire 26.8%, $7,033,000 over baseline
25 Police Department – Historical Share
of General Fund
26 Fire Department – Historical Share of
General Fund
27 Proposed Public Safety Department Reductions
28 Dept 2025-26
Proposed Budget 8% Target FY 2024-25
Reductions
FY 2025-26
Proposed
Reductions
Police Department 77,779,139 6,222,331* 160,502 2,777,500 Fire Department 55,866,080 4,469,286 900,000 4,124,000 Total 133,645,219 10,691,618 1,060,502 6,386,500
*Cost of eliminating 21.0 Officers is $5,485,000
Police Proposed Reductions
29 Description Amount Impacts
Eliminate 1.0 FTE Records Supervisor
(vacant)
$150,000 Impact ability to process and maintain legally mandated custody of evidence and required court records; reduce
public facing services for the community.
Eliminate 1.0 FTE Communications
Supervisor (vacant)
$170,000 Oversees 911 call center; will impact coordination of significant events and deployment of resources; may
increase City liability and hamper response.
Eliminate 1.0 FTE Community
Services Officer (vacant) and vehicle
support costs
$143,000 Increased priority one response time due to less officers being available, reduced capacity to respond to low level calls such vandalism, graffiti and property crimes. Less opportunity for community engagement.
Police Proposed Reductions (cont.)
30 Description Amount Impacts
Eliminate 6.0 FTE Officers (4.0 filled,
2.0 vacant) and support costs
$1,488,500 Will lead to increased priority one response time, potential increase in crime due to less visibility, reduced investigative capability, less community engagement and decreased
proactive policing.
Eliminate 2.0 Detectives (filled) and
support costs
$523,000 Reduction in specialized investigations, potentially weakening evidence gathering and leading to fewer
successful prosecutions. Potential erosion of public
confidence.
Eliminate 1.0 FTE Sergeant (filled)
and support costs
$303,000 Reduced supervision and oversight resulting in reduction in management during critical incidents leading to liability for the City.
Total $2,457,500
Fire Proposed Reductions
31 Description Amount Impacts
Professional Services $122,000 No impact; appropriations needed in FY 24/25 have outside funding source for FY 25/26
2.0 FTE ** Non- Sworn
Positions
$225,000
Total $347,000
Fire Department: Brown Out/ Black Out Options
32 Description Amount Impacts
3-0 Engine Company Brown Out
(OT and Supplies)
$909,100 Available resources will be reduced by one engine, impacting response times in the browned-out district and surrounding districts.
4-0 Truck Company Brown Out
(OT & Supplies)
$960,000 Specialized truck resource will be reduced by one truck, impacting responses for all structure fires, vehicle accidents requiring extrication and rescue assignments; delayed
response times in all districts.
Blackout of 3-0 Engine Company $2,482,000 Eliminate 9.0 FTEs (4.0 FTE vacant, 5.0 FTE filled). Delay response times to blacked-out district and surrounding
districts, increase demand on remaining Engine companies.
Blackout of 4-0 Truck Company $3,582,000 Eliminate 12.0 FTEs (4.0 FTE vacant, 8.0 FTE filled). Reduce Truck Companies in Santa Rosa from 2 to 1, delay response times and specialty functions to all districts accordingly. $13.1M* in Reductions- All Departments:
Long-Range Financial Forecast (in $ millions)
33 *$6.4M Public Safety
$6.7M Operational/ Admin/ Furloughs
Reserves Projection $13.1M Reduction
All Departments
34 Other Items Being Studied
CalPERS Early Retirement
Would grant eligible employee’s additional years of service toward their pension Must achieve savings supported by a CalPERS actuarial study CalPERS currently performing actuarial study
GF Fleet Reduction
Focus on generating savings across City fleet through:
Reduction of vehicle units
Consolidate uses
Purchasing less expensive vehicles
Issuance of Pension Obligation Bond
Analysis of potential savings and re-amortization of unfunded liability payments 35 Questions?
36