Sebastopol unveils its 2024/25 budget, Part 1
Council plows through the budget, department by department, in epic seven-hour council meeting
This is Part 1 of a two-part article on the Sebastopol budget.
All members of the city council were present for the July 16 city council meeting, including Mayor Diana Rich, Vice Mayor Stephen Zollman, Councilmember Sandra Maurer, Councilmember Jill McLewis, and Councilmember Neysa Hinton.
City council budgets are not glamorous, but they are perhaps the most important document that any city produces in a year. It is, as the city staff report points out, “a reflection not only of the city’s financial resources, but also of the city’s values and priorities.”
Sebastopol’s budget includes a variety of funds for different purposes. Having previously dealt with the capital improvement budget and water and sewer funds over the last few months, the council turned its attention to its biggest pot of money, the General Fund, which funds most city services.
The basics
The proposed General Fund budget for 2024-25 includes $14.2 million in revenue and $15 million in expenses, leaving a deficit of over $670,000. By the middle of the council meeting, that deficit had climbed more than $20,000, as councilmembers added and subtracted spending items. No one in the city was available to provide a final deficit number.
City Manager Don Schwartz introduced the budget with some opening remarks. He thanked fellow budget committee members, Councilmember Sandra Maurer and Vice Mayor Stephen Zollman, for their time, effort and engagement in the process.
He noted that the budget committee estimated that revenues for 2024-25 would increase by 7.6%.
“This is what I’m calling a ‘down-the-middle’ approach,” he said. “It’s neither conservative nor aggressive.” (Past budgets had been accused of significantly underestimating revenue.)
The deficit is about half of what it was last year, but Schwartz warned that that was because of an influx of one-time money, mostly building fees from large projects underway in the city.
“We’re talking about using one-time funds,” he warned, “and while these might last a year or two, they’re not a long-term, sustainable source of revenue.”
“We are on an unsustainable path,” he continued, noting that the reserves could be depleted in three years and the city still needed a large, ongoing source of revenue.
He reminded the council there was a long-term strategy in place to solve this dilemma. That strategy included a sales tax increase, which the council voted to put on the November ballot later that night. It also included hotels and economic development, fire consolidation, the creation of an enterprise infrastructure financing district (EIFD) and reducing costs and increasing efficiency.
“I think there is a path forward to financial sustainability,” he said. “We can work together with our community and get there. I think we’ve made a start on that path, and this budget continues down that path.”
There are no layoffs planned.
On the expenditure side, the budget allocates $300,000 toward preserving city assets such as buildings and streets and $116,000 in new technology for city hall to increase cyber security. It also includes almost $100,000 for consultants of various stripes, meant to improve the efficiency of city government.
The budget also saw some significant reductions in some areas, such as engineering support, maintenance contracts, and support for non-profit community organizations.
A closer look
The council settled in for an hours-long journey through the budget. Schwartz had prepared a document that listed all the changes to each department’s budget. The council went through this list item by item. Some items were uncontroversial, others required discussion. We are reprinting this list with the results of the council’s thumbs up/thumbs down votes—and salient commentary.
City Council Budget
$2,500 reduction in contract with PCA for video for council meetings. APPROVED 5 to 0.
$4,000 reduction for legal hearing notices. APPROVED 5 to 0.
$3,500 reduction in cost for Shuttle Fare program. Schwartz explained that Sonoma County Transit, knowing the city’s financial difficulties, simply cut the cost of this program. APPROVED 5 to 0.
$36,800 shift of the Homeless Outreach contract to the Police Department, which has lead responsibility for this role. Vice Mayor Zollman disagreed with this move, but it was APPROVED 4 to 1.
$10,000 shift of costs for public communications to city manager’s office. APPROVED 5 to 0.
$7,186 increase in benefits which may occur with new councilmembers. APPROVED 5 to 0.
$10,000 increase for contract support for basic goal-setting session. APPROVED 5 to 0.
$4,000 increase to fund membership in the Government Alliance for Racial Equity and organizations such as the NAACP, Latino Service Providers, and those representing differently abled members of our community. DENIED 4 to 1, Zollman dissenting. This item was requested by Vice Mayor Zollman at the request of one of these organizations. Councilmember Maurer suggested a lower figure, but, in the end, no one but Zollman was in the mood for a symbolic gesture given the city’s financial state.
City Manager Budget
Additions include:
$52,000 for continuing with Bob Leland of Baker Tilly, possible management review of Administrative Services to improve financial reporting, estimating expenses for capital projects, etc. APPROVED BUT REDUCED TO $32,000 on a 5 to 0 vote, with the option to come back at midyear.
Equipment, Technology, and Vehicle Reserve fund: $23,000 for analysis of financing needs for City fleet and identification of opportunities for operational improvements. APPROVED AT $20,000 on a 5 to 0 vote.
$10,000 for facilitator for performance evaluation. APPROVED 5 to 0.
$6,000 for payment for prior work for Relaunch program. APPROVED 5 to 0. (For transparency: the author of this article worked as a consultant for the city of Sebastopol from March 2022 to June 2023 for a city program called Relaunch Sebastopol. This $6,000 is for an invoice that the city forgot to pay in June 2022.)
$10,000 shift of contract costs for public communications from City Council to City Manager. APPROVED 5 to 0.
City Attorney & Assistant City Manager/City Clerk Budgets
City Attorney Budget—No significant changes.
Assistant City Manager/City Clerk Budget
$10,000 in reduced ballot measure expenses to reflect current plans. APPROVED 5 to 0.
Administrative Services Budget
$114,600 in reductions for new server, cost allocation study, creation of Section 115 trust, and ballot measure expenses. APPROVED 5 to 0.
$10,000 increase for software maintenance. APPROVED 5 to 0.
$25,000 shift of expenses for property tax services from non-departmental budget. APPROVED 5 to 0.
$3,000 increase for one person in City to attend Marin-Sonoma Leadership Academy or other training. DENIED 3 to 2 (Zollman and McLewis dissenting). Zollman and McLewis mentioned the importance of professional development, and McLewis pointed out the need in city government for succession planning.
$30,000 for classification/compensation study. APPROVED 4 to 1 (Maurer dissenting).
$10,000 to update 2022 staffing study to reflect organizational changes. APPROVED 4 to 1 to bring back at midyear. (Maurer dissenting). Pointing out that the past staffing study (2022) was never dealt with and just sat on the shelf, Maurer said, “I don’t want to do a comp study or a staffing study until we actually have time to deal with it and make the changes that we need. If we pass a sales tax and we actually have the funds to fix the problems then it would make sense to do the staffing study.”
$2,400 for training and certification from the California Intergovernmental Risk Authority (CIRA). APPROVED 5 to 0.
Planning Budget
Wrapped into the discussion of planning was a discussion of whether or not to remove or decrease staff oversight time from city committees, such as the Public Arts Commission and the Climate Action Committee, as well as a discussion of whether to combine the Design Review Board with the Planning Commission. In the end, the council asked Schwartz to bring these issues back to the council on their own.
$91,800 in reimbursement of staff time for revenue-generating work on development projects ($21,000) and grants ($70,800). APPROVED 4 to 1 (McLewis dissenting.)
$50,000 for monitoring of ownership housing units, from the Housing Linkage Fee fund. DENIED 4 to 1 (Zollman dissenting.)
$22,000 for monitoring of rental housing units from the Inclusionary Housing Fund. APPROVED 3 to 2 (Hinton and McLewis dissenting).
The previous two items referred to monitoring housing designated affordable (both owned and rental) to insure that they didn’t convert to market-rate housing. This kind of expensive monitoring is not required by the state’s Housing and Community Development (HCD) department, but should the HCD challenge Sebastopol about this, Zollman noted that having paid for monitoring would be a good way to prove that the city was doing all it could to preserve its affordable housing stock. The council decided to split the difference, paying for monitoring for rental housing only.
The Senior Center, Community Center, and Ives Pool
This year’s budget zeros out funding for most nonprofits in Sebastopol, with the exception of the Senior Center, the Community Center and Ives Pool, which together operate as a kind of unofficial Parks and Recreation department for the city. They will continue to get maintenance support from the city’s public works department.
Senior Center. The city is reducing its contribution to the Senior Center by $38,250 and eliminating financial support for operations. It is doing so with the support and cooperation of the Senior Center board and staff. APPROVED 5 to 0.
Community Cultural Center. The budget reduces support for the Community Center’s general operations by $76,600. It still provides the center with $58,300 to cover six months of operating expenses as it attempts to become self-sustaining. APPROVED 4 to 1 (Zollman dissenting). Zollman seemed impatient with the Community Center’s continued reliance on city money, noting that all the other nonprofits in town were self-sufficient, at least in terms of operational expenses. All the other council people said they’d like to reassess the situation at mid-year. Mayor Diana Rich (a former Community Center director) and Councilmember McLewis (a former board chair of the Community Center) both indicated that they might be open to providing another six months of operational support at the mid-year budget adjustment.
Ives Pool. There were no changes to the proposed budget. APPROVED 5 to 0.
Part 2 of this article—which will look at changes to the budgets for Fire, Police, Building, Engineering, and Public Works—will run tomorrow. You can watch the July 16 city council meeting here.