PREPARATION FOR FY 24-25 BUDGET
CITY OF SEBASTOPOL
CITY MANAGER DON SCHWARTZ
MARCH 19, 2024
WHAT THE GENERAL FUND FUNDS
SOME EXAMPLES • POLICE: TRAFFIC CONTROL, CRIME PREVENTION AND RESPONSE, INVESTIGATIONS • FIRE: MEDICAL CALLS, PERSONAL NEEDS, FIRE RESPONSE, INSPECTIONS • PUBLIC WORKS AND ENGINEERING: STREETS, SIDEWALKS, PARKING LOTS, STORM DRAIN SYSTEM, PARKS, POOL,
BUILDINGS
• PLANNING: NEW HOUSING, REMODELS/UPGRADES, TRAFFIC PLANNING • BUILDING: ENSURING SAFETY
• CLERK: ELECTIONS, LEGISLATIVE COMPLIANCE, PUBLIC ACCESS, CITY RECORDS • ADMINISTRATIVE SERVICES: BUDGETING, ACCOUNTING, PAYING THE BILLS, HR (HUMAN RESOURCES), INFORMATION
TECHNOLOGY
• SUPPORT FOR NON-PROFITS
• CITY MANAGER
STARTING POINT: LONG-TERM PROJECTIONS
• PROJECTED FY 24-25 DEFICIT: $2 MILLION
• PROJECTED AVERAGE FUTURE DEFICITS: $2.9 MILLION
• REFLECTS HIGHER SALARY, PENSION, LIABILITY, AND OTHER COSTS • REFLECTS HIGHER REVENUES FROM EXISTING SOURCES
• INCORPORATES FUNDING TO MAINTAIN OUR PHYSICAL ASSETS
• DOES NOT ADDRESS NEEDS FOR STREETS (FOR THE MOST PART)
FY 23-24: PROJECTIONS
• BUDGETED $1.7 M DEFICIT
• LIKELY TO REDUCE THAT SIGNIFICANTLY BY YEAR-END
• VACANCIES
• OTHER SAVINGS
• $160,000 IN REVENUE
• AMOUNT WILL CHANGE BY YEAR-END; THESE ARE PROJECTIONS
PROPOSED APPROACH FOR TONIGHT
• STAFF PROVIDES RECOMMENDATIONS TO COUNCIL TO:
• CONSIDER AND APPROVE DIRECTION, OR
• PROVIDE ALTERNATE DIRECTION
• WE DON’T WANT TO WORK ON ISSUES UNLESS YOU’RE
INTERESTED
• WE’RE NOT LOOKING FOR DECISIONS ON SPECIFIC BUDGET ITEMS
COST ANALYSIS
• DATA SUGGEST WE HAVE HIGHER COSTS PER CAPITA THAN OTHER
SMALL CITIES
• EXPECT SMALL CITIES TO BE HIGHER PER CAPITA THAN LARGER CITIES • SOME THINGS WE SHOULD DO
• LOOK AT THE DATA MORE CLOSELY
• BE OPEN TO DIFFERENT MODELS OF SERVICE (SUCH AS FIRE CONSOLIDATION) • PURSUE ‘BEST VALUE’ PROCUREMENTS; MAYBE ‘PIGGY-BACK’ ON OTHER CITIES • COMPARE COMPENSATION WITH OTHER CITIES
REVENUE OPTIONS: TOP TIER
• SALES TAX MEASURE
• PURSUE OPTIONS FOR NOVEMBER
• PURSUE COUNTY $ SUPPORT
• BE OPPORTUNISTIC, ESPECIALLY FOR ONE-TIME ‘ASKS’
REVENUE OPTIONS: TOP TIER, CONTINUED
• ENHANCED INFRASTRUCTURE FINANCING DISTRICT (EIFD)
• KEEP IT MOVING
• LIBRARY LEASE
• LIBRARY DIRECTOR OPEN TO NEGOTIATION
• ENGAGE OTHER CITIES; SOME INTERESTED
• MEASURE Y PROVIDES LIBRARY WITH CONSIDERABLE REVENUE
• JOINT POWERS AUTHORITY (JPA) TO BE REVIEWED THIS YEAR
REVENUE OPTIONS: TOP TIER, CONTINUED
• BUILDING FEES
• COMING SOON
REVENUE OPTIONS: PURSUE LATER
• PUBLIC BROADCASTING FEE ON CABLE BILLS
• EXPLORE CHANGES TO FORMULA BUSINESS ORDINANCE
• SELLING CITY PROPERTY
• ENFORCING BUSINESS LICENSE FEES
• COST RECOVERY FOR PLANNING, FIRE, ETC.
• REVIEW LEASES
POTENTIAL SHORT-TERM CHANGES
• CONSIDER ELIMINATING STAFF SUPPORT AND CITY EXPENSES FOR CLIMATE ACTION
AND PUBLIC ART COMMITTEES
• CLIMATE ACTION: REGIONAL CLIMATE PROTECTION AUTHORITY (RCPA) SONOMA CLEAN POWER, AND
ZERO WASTE SONOMA SUPPORT REGION
• SEBASTOPOL CENTER FOR THE ARTS AS ‘HOME’ FOR PUBLIC ARTS ISSUES? • POTENTIALLY RE-STRUCTURE TO BE MORE LIKE PEACE WALL COMMITTEE OR LIBRARY ADVISORY BOARD • INVOLVE COMMITTEES IN THE PROCESS
• REDUCE BROADCASTING COSTS AND HOURS FOR INTERIM PLANNING DIRECTOR • RE-DIRECT STAFF TIME TO OTHER PRIORITIES WHICH MAY INCLUDE:
• ENHANCED INFRASTRUCTURE FINANCING DISTRICT
• PARTICIPATE IN COUNTY-WIDE DISCUSSIONS ON ALLOCATION OF HOUSING BONDS PROCEEDS • ECONOMIC DEVELOPMENT
• NEW REVENUE OPTIONS
POTENTIAL SHORT-TERM CHANGES
• CONSIDER CONSOLIDATING PLANNING COMMISSION AND
DESIGN REVIEW BOARD
• A COMMON MODEL
• COULD LEAD TO STREAMLINING AND EASIER BUSINESS RECRUITMENT • WOULD REQUIRE CHANGE IN CITY CODE
• ENGAGE COMMISSIONERS AND BOARD MEMBERS IN THE PROCESS
POTENTIAL SHORT-TERM CHANGES
• CONSIDER ELIMINATING BUSINESS LICENSES FOR VENDORS AT EVENTS • $6,200/YEAR IN REVENUE; PLUS $2,300 FROM FARMERS’ MARKET • STAFF TIME TO PROCESS LIKELY EXCEEDS THE REVENUE
• CONSISTENT ENFORCEMENT VERY DIFFICULT
• OUR REQUIREMENT MAY BE UNCOMMON
• WOULD NOT AFFECT COLLECTION OF SALES TAXES
• CONSIDER ‘CENTRALIZED’ COLLECTION AND PAYMENT BY EVENT SPONSOR • SUPPORTED BY BARLOW, CHAMBER, DOWNTOWN ASSOCIATION
• MAY START SHIFT TO MORE BUSINESS-FRIENDLY REPUTATION AND THUS MORE
REVENUE
POTENTIAL SHORT-TERM CHANGES
• FORMALLY ELIMINATE COMMUNITY GRANTS PROGRAM
• UNLIKELY TO RESUME GRANTS NEAR-TERM
• MAKING DECISIONS ANNUALLY CREATES UNCERTAINTY
• UNRELATED TO SUPPORT FOR SENIOR CENTER AND COMMUNITY CENTER
POTENTIAL SHORT-TERM CHANGES
• CONSIDER SHIFTING REMAINING $1 MILLION IN ASSIGNED PENSION RESERVE TO SECTION 115 TRUST
• $1.8 MILLION ALREADY SHIFTED
• CREATES POTENTIAL FOR HIGHER RETURNS
• WOULD CONSULT WITH FINANCIAL ADVISORS FIRST
• MIGHT LOOK AT PRE-PAYING CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT
SYSTEM (PERS) OR OTHER POST EMPLOYMENT BENEFITS (OPEB) COSTS AS
ANOTHER OPTION
POTENTIAL SHORT-TERM CHANGE
(NOT DISCUSSED IN STAFF REPORT)
• FORMALLY RESCIND STAFF ABILITY TO WAIVE FEES, UP TO
$1,000
• DEPARTMENT HEAD AUTHORITY: 25%
• CITY MANAGER AUTHORITY: 50%
FISCAL YEAR 24-25 BUDGET PREPARATION
• PREPARE BUDGET IN ALIGNMENT WITH COUNCIL GOALS & VALUES • GOAL-SETTING LAST DONE IN 2019
• STAFF WILL MAKE BEST EFFORT TO REFLECT GOALS AND VALUES • WELCOME COUNCIL DIRECTION
• SUGGEST STARTING WITH THE ITEMS TO FOLLOW
• BE NIMBLE: THINGS WILL CHANGE BETWEEN NOW AND BUDGET
ADOPTION
FISCAL YEAR 24-25 BUDGET PREPARATION
• RECOMMENDED BUDGET TO BE BALANCED
• ON-GOING REVENUE TO MATCH ON-GOING EXPENSES
• TO INCLUDE INITIAL $300K TOWARD PRESERVING OUR ASSETS
EXAMPLES OF DEFERRED MAINTENANCE
FISCAL YEAR 24-25 BUDGET PREPARATION
• LIMIT USE OF ONE-TIME FUNDS TO ONE-TIME EXPENSES
• ONE-TIME FUNDS INCLUDE FUND BALANCE AND ASSIGNED RESERVES • COULD SUPPORT TRANSITION TO NEW SERVICE MODELS
FISCAL YEAR 24-25 BUDGET PREPARATION
• CONSIDER ONE-TIME INVESTMENTS IN HIGH-LEVERAGE
OPPORTUNITIES FOR EFFICIENCY OR COST SAVINGS
• POTENTIAL EXAMPLES:
• TECHNOLOGY
• BUILDINGS OR INFRASTRUCTURE
• LEADERSHIP DEVELOPMENT
FISCAL YEAR 24-25 BUDGET PREPARATION
• ENSURE A SOLID ADMINISTRATIVE FOUNDATION
• AT SOME POINT, REDUCTIONS IN KEY FUNCTIONS UNDERMINE THE
ORGANIZATION
• WE MAY BE NEAR (OR PAST) THAT POINT IN SOME CASES
• ASSESSMENT OF ORGANIZATION ON-GOING
• DON’T EXPECT ACROSS THE BOARD, EQUAL REDUCTIONS
FISCAL YEAR 24-25 BUDGET PREPARATION
• “CULTURE EATS STRATEGY FOR BREAKFAST”
• ENGAGED EMPLOYEES ARE MORE PRODUCTIVE
• ENGAGEMENT INCLUDES:
• BEING CHALLENGED AND ACCOUNTABLE
• PROVIDE OPPORTUNITIES FOR MASTERY AND AUTONOMY
• CREATING A SENSE OF PURPOSE
• HIGHER ENGAGEMENT CREATES MORE VALUE
FISCAL YEAR 24-25 BUDGET PREPARATION
• ECONOMIC DEVELOPMENT CAN HELP
• STARTS WITH A BUSINESS-FRIENDLY ENVIRONMENT . . . WHILE KEEPING OUR STANDARDS • NOT PROPOSING AN ECONOMIC DEVELOPMENT STRATEGY NOW
• SOME WAYS TO START:
• SHIFTING STAFF TIME AND SKILLS (I.E., FORMULA BUSINESS TOPIC; COMMUNITY
DEVELOPMENT DIRECTOR)
• SELECTIVE INVESTMENTS
• ELIMINATING/CHANGING VENDOR FEES FOR EVENTS
• COMBINING PLANNING COMMISSION AND DESIGN REVIEW BOARD • SUPPORT NEW HOTELS
FISCAL YEAR 24-25 BUDGET PREPARATION
• PROMOTE TRANSPARENCY
• SHARING INFORMATION WITH THE PUBLIC
• IMPROVING OUR ACCOUNTING AND REPORTING
• COST ALLOCATION FROM WATER/SEWER: TO REPORT AS REVENUE • REMOVING POLICE DONATION FROM GENERAL FUND BALANCE
• SEPARATING FLOOD RECOVERY FUNDS FROM GENERAL FUND BALANCE • COMBINING ALL SALES TAX REVENUE IN THE GENERAL FUND
• CREATING SEPARATE FUND FOR MEASURE H
• MAKING REPORTS EASIER TO UNDERSTAND
FISCAL YEAR 24-25 BUDGET PREPARATION
• LEVERAGE OPPORTUNITIES FOR SHARED SERVICES
• EXAMPLES:
• SANTA ROSA SEWAGE TREATMENT PLANT
• REDCOM (FIRE AND AMBULANCE DISPATCH)
• OTHER POSSIBILITIES EXIST
• NEED TO ASSESS THEM INDIVIDUALLY (I.E., FIRE CONSOLIDATION)
FISCAL YEAR 24-25 BUDGET PREPARATION
• CONSULTANTS AND CONTRACTORS
• TWO REASONS TO USE THEM:
• THE NEED EXCEEDS THE AVAILABLE STAFF TIME
• STAFF LACK THE EXPERTISE
• SEBASTOPOL’S PRACTICES IN LINE WITH OTHER CITIES
• BOB LELAND
• R3 FOR HAULING CONTRACTOR
BUDGET PROCESS, TIMING, ETC.
• SCHEDULE TO BE DETERMINED
• BUDGET COMMITTEE TO PREVIEW RECOMMENDATIONS
• STAFF TO INCORPORATE UPDATED INFORMATION
NOTES ON SENIOR CENTER AND COMMUNITY CENTER
CURRENT YEAR (FISCAL YEAR 23-24) CITY FUNDING
• COMMUNITY CENTER
• $135,000: OPERATIONS AND PROGRAMS
• $138,000: MAINTENANCE AND UTILITIES
• $50,000: ARCHITECT
• SENIOR CENTER
• $38,000: OPERATIONS AND WAGES
• $31,000: MAINTENANCE
CONCLUSION
• ALL OPTIONS ARE ON THE TABLE; TRYING TO AVOID LAY-OFFS • BUDGETING IS ABOUT CHOICES AND TRADE-OFFS
• THIS IS HARD
• KEY CRITERION: WHAT’S IN THE BEST LONG-TERM INTERESTS OF THE RESIDENTS OF SEBASTOPOL?
• FURTHER COUNCIL DIRECTION WELCOME