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Petaluma projects tight budget, potential cuts at city hall

Petaluma's budget outlook remains lean, although a new shopping center and improvements in the regional and local economy provide some hope, City Council members heard this week.

Bill Mushallo, the city's finance director, provided a short and long-term outlook to the council as part of a mid-year budget review.

Increases in sale tax and property tax revenues, totaling about $360,000, are promising. But franchise fees decreased and the city had "significant" drops in fines and forfeiture funds of about $500,000.

In total, general fund revenues this fiscal year are down about $615,000, Mushallo said. At the same time, $268,000 in spending was cut.

Those figures would leave about $400,000 in the city's general fund budget at the end of the fiscal year in June.

"The city remains dangerously close to a zero balance in the general fund," Mushallo said. "All budgets are really, really tight."

Beyond this fiscal year, the city is looking at an average $1.6 million deficit between revenues and expenditures each of the next few years, he said, leaving the city's emergency reserve fund essentially empty.

"We've really got a lot of work to do here in balancing next year's budget," he said. "We also think that rebuilding reserves is very critical for the city over the next several years."

The city will tackle how to attain those savings in the next few months.

Given current projections, the city would be $6.4 million out of balance by 2016.


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