The tide of red ink swamping area cities has largely bypassed the town of Sonoma.
Through careful management of city finances, Sonoma has kept its $10 million-a-year budget balanced without laying off workers, raising taxes or draining reserves.
Sonoma was not spared the effects of the recession. The city's primary sources of revenue — property, sales and hotel room taxes — declined for a period, just as they did in other communities, before showing some growth this fiscal year.
In response, the City Council moved to control costs. Some pay raises were deferred, others were canceled. City employees agreed to pay a larger share of health insurance and retirement costs.
This year, Sonoma contracted with the Valley of the Moon Fire District, allowing the city to eliminate its fire department, reducing the city staff to 36 employees for 10,600 residents. Sonoma went the same route with police protection in 2004, reducing a major expense before the real estate bubble burst, starting a downward economic spiral that's only now reversing course. Sonoma never joined the list of cities that retroactively increased pension benefits, and it has always relied on nonprofit groups for recreation, after-school and senior programs, forgoing the expense of a city parks department.
It's an impressive record of fiscal stewardship, and city officials are justifiably proud.
Now, however, they have experienced a setback that they believe will require additional revenue, and the city is asking voters to approve Measure J, a five-year, half-cent sales tax increase on the June 5 ballot.
The setback is the state's elimination of redevelopment, a mechanism that allowed cities and counties to sequester property revenue in blighted areas to pay for economic development and affordable housing.
City Manager Linda Kelly said Sonoma uses redevelopment money for street maintenance (about $800,000 a year), graffiti abatement and economic development as well as to offset some staff costs related to managing the program.
The city canceled business rehabilitation and business facade improvement programs that were funded by redevelopment money, but it still faces a budget shortfall of $1.2 million to $1.7 million. Measure J would raise about $1.1 million a year, meaning the City Council still would have some budget-cutting ahead.
Opponents argue that Sonoma relied too much on redevelopment for routine services and is moving prematurely to raise taxes. It's true that the full extent of Sonoma's shortfall won't be known until property tax dollars diverted to redevelopment are reallocated to cities, school districts and other beneficiaries. But it's also true that Sonoma must adopt a budget for the new fiscal year by July 1, and regardless of how those dollars are reallocated, the city faces a large budget deficit and has few places to cut without scaling back police protection or reducing street maintenance.
If it weren't for the recession, Kelly says Sonoma may have weathered the loss of redevelopment without seeking its first tax hike in 20 years. As it is, Measure J is a modest, short-term response to a big financial hit on a small city that has a record of managing its resources conservatively to maximize public services for the fewest possible tax dollars.
To maintain that tradition, The Press Democrat recommends approval of Measure J.