Today might become known as the day that the Santa Rosa City Council retreated. At its Special meeting held in the Legends Restaurant at the Bennett Valley Golf Course, the Council heard from its City Manager and staff that the unexpectedly large increases in its expenses, coupled with inadequate revenue, has created permanent losses to its reserve for as far as can be projected. Unless corrected, the City will be out of money by 2020.
In the face of this awful news, the Council gave their approval to beginning their budget development process for the 2019-2020 fiscal year over six months early. By this September, it hopes to begin to determine what the City’s services will look like beginning in July of 2019.
But the planning will actually begin next Tuesday. At their weekly meeting, they are expected to decide whether to place on the November ballot three revenue enhancements: a 25% increase in the City’s sales tax to raise $9 million per year to fund City operations, a 3% increase in the City’s Transient Occupancy Tax to raise $1.5 million per year to fund City operations, and an increase in the City property tax to provide financial resources to produce new, and preserve existing, affordable housing for households earning between 0% - 80% of Area Median Income (AMI), and affordable homeownership opportunities for households earning between 80% - 120% of AMI.
The City Manager has asked the Council to meet the budget gap between revenue and expenses by closing the gap half way with cuts in expenses, and the remainder by increases in revenue. It is expected that voters will expect a formula of that design.
But most will admit that a retreat in the level of public services is coming. Where the $7 million in cuts will occur is anyone’s guess, and no specifics were forthcoming today. A series of meetings held throughout the City in th next two months will help guide the Council and staff.