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Petaluma

Argus-Courier Editorial:

Petaluma’s fiscal crisis is worsening


Published: Friday, October 30, 2009 at 3:00 a.m.
Last Modified: Thursday, October 29, 2009 at 11:49 a.m.

The city of Petaluma is only four months into its new fiscal year and has already exposed an alarming $2 million shortfall between tax revenues and expenditures, a dire situation that has prompted city officials to meet next week to review the unavoidable prospect of additional job cuts and further reductions in public services.

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During the last year, the city has cut 50 positions, or more than 15 percent of its overall payroll, to deal with steeply declining sales and property tax revenues brought about by the worst economic downturn since World War II. The city’s general fund, which pays for most city services, has shrunk from $44 million in the 2007-2008 fiscal year to just $32 million this year.

With fewer people shopping for cars and retail goods during that same period, sales tax revenues declined from $11.4 million to $8.4 million, according to City Manager John Brown. There is a strong probability that the downward sales tax spiral will continue well into 2010.

Property tax revenues, the city’s second-largest funding source behind sales tax receipts, are also plummeting. Sharp declines in residential and commercial property values have caused the county assessor to re-appraise properties, a practice that is providing tax relief to many Petaluma homeowners who bought their homes between 2003 and 2006 at the peak of the market. But these lower assessments have translated into significantly lower property tax revenues for the city.

Were these numbers not bad enough, the cash-hemorrhaging state of California is attempting to appropriate more than $1 million in Petaluma property tax revenues and $6 million in redevelopment agency funds.

With 80 percent of the city’s general fund dedicated to employee salaries and benefits, the city will be unable to avoid further staff reductions in attempting to close the budget gap. The exact number of jobs to be lost will largely be determined by the willingness of employee unions to consider reductions in their wage and benefits packages which, to date, have remained largely unchanged. Last summer, employee unions showed little willingness to make such concessions, and this forced the city to eliminate nine jobs.

City leaders have been reluctant to reduce staffing levels in their public safety departments, and with good reason. Public safety has been and should always be the single most important city service. But it’s also the city’s single largest expense, and it will be difficult to close the current budgetary shortfall without obtaining some pay or benefit concessions from the unions representing police officers and firefighters. Negotiations are ongoing, according to Brown, but whether they result in any tangible savings remains to be seen.

Given that the city has eliminated vacant positions, consolidated others and tapped very deeply into its reserves, there are few places left to cut. Petaluma has outsourced its swim program and planning services to private companies, and last month announced it was exploring the possibility of outsourcing or consolidating animal services with another agency, like the county of Sonoma.

In addition to making necessary cuts, some City Council members would be wise to begin looking more carefully at the revenue side of the balance sheet. Along with the effects of the ongoing recession, Petaluma’s weak retail sector is further undermining the city’s fiscal health. With local residents continuing to drive out of town for a host of goods and services not generally available in Petaluma, the city collects far fewer sales tax dollars than it would if it had a more fully developed retail sector.

Despite a six-year-old study showing that Petaluma is losing millions in sales tax leakage due to a lack of adequate shopping opportunities, the city has failed to cultivate a more robust and diverse local economy as called for in the city’s general plan. The plan notes the city’s commitment to “provide jobs for un- and under-employed segments of the work force” which, at this time, includes many people in the retail and construction trades who would benefit directly by the construction of two shopping centers awaiting city approval. Expediting those approvals would dramatically help improve the city’s revenue problem while also creating several hundred new jobs.

If the city is to achieve sustainable fiscal stability, it must be willing to make room for the types of stores identified in its General Plan. Only by being proactive in implementing General Plan goals can city leaders ensure that tax revenues will eventually catch up with the city’s unmet needs in the areas of road repairs, park maintenance, transportation improvements, law enforcement and a host of other underfunded municipal services.


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  1. jayzeekayzee says...
    October 30, 2009 9:32:47 am

    RE: Link

    Who wrote this? Obviously someone who dosen't care about the health of the community. Big Box stores are not what this city needs. What it needs is sound management. This op-ed sounds like it came directly from the mouthpiece of Big Development. If you want Rohnert Park or Vacaville, move there. Let Petaluma stay "Eco-centric" buy supporting the small independent businesses that make this town a great place to raise a family. Some of the FAT in goverment is going to have to go. They always talk about public safety being threatened just to scare us into needing Target stores to come to the rescue. The police in this town are mostly "revenuers" so let them support themselves by writing traffic tickets. Give them a quota that they have to fill and hold them to it. Does the City Council hold anyone accountable? There should be plenty of Homeland Security money available for fancy cars and radar equipment. And how about making the police officers get off the cell phone and drive with their windows down when it is not raining? I'm sure those cars have heaters and they could hear all the screeching aroung the neighborhoods I hear at all hours. Don't be fooled folks. The jobs created by Target are not ones that we need and they will only take jobs away from familys that are supported by the businesses that can't compete with their loss leaders and cheap foreign made crap.

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  2. Really? says...
    October 30, 2009 5:31:08 pm

    Wow, one of the most ignorant posts I have read in quite some time.

    What you fail to grasp is the fact that we won't have any cops if the city stays "eco-centric" as you say. I am sure that in your world everyone loves everyone else and they all just get along so maybe having fewer cops would be good.

    I would love however to see you get one of those "quota" tickets you are recommend. I bet you would be on the phone immediately complaining that you got a ticket and didn't deserve it. Absolutely ignorant post.

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  3. jayzeekayzee says...
    November 3, 2009 10:17:17 am

    The city won't have any cops? Now that is ignorant. You either beleive the rhetoric or you work for the developer. Which are you? Ignorant? Or Selfish? Either way, you don't care what happens to our community.

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  4. Petaluma Rosie says...
    November 3, 2009 10:34:56 am

    I think everyone who posts on these forums cares about our community. The reality is that our community is in deep financial trouble and we rely on development dollars to fund basic services. The alternative, which people don't seem to want, is to tax ourselves. If we aren't going to allow development, which seems to be the stance of the City Council majority, then we have to find another way to fund basic services. The current head in the sand approach the Council Majority is taking isn't working.

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  5. walk2k says...
    November 3, 2009 10:48:55 am

    That is correct, police is a money-making business, they support themselves from traffic tickets. On the other hand more budget cuts means fewer other services like schools and roads.

    I'm not all for selling out the town for a quick buck in the short term at the expense of long-term development but then again the city does need money and it's proven that people DO leave Potholuma to shop at places like Costco, Walmart, etc..

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  6. Really? says...
    November 3, 2009 6:08:01 pm

    jayzeekayzee
    OK- I'll agree the won't have any cops statement is a bit of hyperbole, but your post remains ignorant and poorly thought out.
    The following statements are ignorant:
    1. "Big box stores are not what this community needs" Yes it is. There are studies available to demonstrate that. Not worth arguing this as you obviously drank the big box is evil Koolaid.
    2.Some of the fat in government has got to go. At the state and federal level I would agree. On the local level 250 employees for a city of 60,000 is very thin (Press Democrat article).
    3."The police in this town are mostly "revenuers" so let them support themselves by writing traffic tickets" You are obviously a cop hater so I won't bother with defending them, I'll just get to the heart of your ignorance. Yes they write tickets, but very little of the money gets to the city. The fines are collected by the County and they keep a share. The State takes its share. The city ends up with a small percentage. They write them to keep traffic in line, not to make money.
    4."Give them a quota that they have to fill and hold them to it" As a cop hater I am surprised that you would advocate writing tickets to make money. Most cop haters complain that they write too many tickets, but you want more?
    5. Homeland security money? Seriously? You obviously have no idea how grants work. They almost never cover operating costs but are aimed at specialized programs. Grants can supplement, but not replace actual operating costs.
    6."And how about making the police officers get off the cell phone and drive with their windows down when it is not raining?" I actually agree with you on this one.
    7"The jobs created by Target are not ones that we need..." Try to back that statement up. The retail leakage study and the recent FEIA's both indicate otherwise. Better yet, tell that to someone who needs a job.

    Again-Your post is ignorant and offers nothing as far as solutions. Have an "Eco-centric" day.

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