Healdsburg's general fund is doing better than expected thanks to an uptick in sales and property tax revenues as well as plan-check fees, reflecting an improving economy.
A mid-year review shows sales tax proceeds, the largest source of income in the city budget, at more than 4 percent greater than expected, on pace to bring in a total $3.3 million for the fiscal year.
"This looks like good news," City Councilman Tom Chambers said. "We're still in the red, but a lot better off than anticipated."
"This is a really nice surprise," Councilman Jim Wood said. "With the upturn in the economy, this is fabulous news."
The upshot of the rosier-than-expected budget is that the city won't have to tap its reserve funds as much as expected to balance its $8 million general fund.
Instead of having to use $808,000 in reserves, the city now estimates having to draw down $460,000, leaving a total of $5.3 million in reserves.
Hotel bed tax revenues are up 4 percent compared to the same period last year, even though city officials were predicting an even bigger jump for the tourist-centric town in the heart of Wine Country.
This year's budget is part of a trend in Healdsburg, where over the past several years in budgets have ended up better than dire forecasts that included warnings of reserves running dry in a few more years.
"To some people, it may look like we're calling wolf all the time," Councilman Gary Plass said. "But we're not. The reality is, I believe the community would want us to be as conservative as can be when it comes to money."
He said the city typically budgets each year for a "worst-case scenario."