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Slow Growth, More Cuts Ahead

The city council will vote on whether to make additional cuts to the 2012-13 budget at Monday's special meeting on the budget

 

Petaluma's fiscal situation has improved, with more money in reserves for the first time over the last four years. But spending has also increased, forcing the city to make further cuts to the budget or figure out how to increase revenue, according to a recent report by Petaluma Finance Director Bill Mushallo.

Mushallo will discuss the city’s financial situation at a special meeting Monday, which will include asking the council to vote on changes in order to balance the 2012-13 budget.

The city’s general fund reserves are estimated to be $1.4 million by the end of June, or 4 percent of the total budget, much lower than the 15 percent typically recommended.

“An unexpected revenue shortfall or expenditure increase could deplete (the) fund balance,” Mushallo writes in his report. “All budgets, especially salaries and benefits, remain very tight.”

Read the report here

But there is also good news.

Revenues from property taxes also increased by $212,000 following the dissolution of redevelopment agencies and sales tax revenues are up by 4 percent. Revenue from city licenses, permits and fines have also increased by $233,000.

Transit occupancy tax, which hotel guests pay, has also increased over the past two years and is expected to bring in an additional $200,000 next year.

However, expenses will also increase with an additional $300,000 being spent on police overtime and comp time (although half the amount will be reimbursed by asset seizure funds.)

In addition, the police department’s equipment budget is also increasing by $84,000 to pay for updated parking enforcement software, while the fire department will get an additional $22,000 for battalion chief overtime.

Salaries make up 80 percent of the city’s expenses.

Monday’s meeting starts at 6pm at City Hall.

Neal Fishman February 11, 2013 at 05:48 PM
Good to know that revenues are up, but why the extra police overtime? Is the crime rate up? Makes me wonder if new ordinances, like the police proposed massage parlor ordinance, should be held in abeyance. If we have to spend new money on police salaries, perhaps we shouldn't be making more work for them.
SP February 12, 2013 at 06:06 AM
What isn't clear is how it was all funded...just that it was spent. Could some of the police expenditures have come from grants like the DUI Avoid 13? Add the extra parades (go Petaluma Nationals) for Little League with 20,000+ spectators and a murder suicide and that eventful year gets expensive. Good point worth understanding Neal.

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