Healdsburg may have to absorb $600,000 in costs

Healdsburg is bracing for another blow to its already depleted general fund, possibly within weeks, because of the loss of its redevelopment programs.

The City Council was informed Monday evening that the general fund may have to cover $600,000 in administrative costs that were in the redevelopment budget.

That comes on top of an estimated $984,000 deficit the $7 million general fund already faces at the close of the 2011-2012 budget year on June 30.

"I'm holding my breath and the shoe has not fallen," Finance Director Heather Ippoliti told the council during a budget workshop. "There is a possibility the $600,000 might hit the general fund this fiscal year."

More than 95 percent of the general fund goes to the Police and Fire departments' budgets. Although the city has $4.7 million in reserves, those are projected to dry up by mid-2016 because of more anticipated chronic deficits.

Redevelopment programs were ended last year by Gov. Jerry Brown and the Legislature in an effort to redirect the property tax revenues they relied upon to schools and other underlying agencies.

Ippoliti said the state Department of Finance, which is determining how much redevelopment money cities and counties can hang on to for existing projects, is limiting the way local governments allocate administrative costs to those programs.

Healdsburg planned to have redevelopment funds pay for $856,000 in costs associated with city administration, consultants, the City Council and the finance department because they oversee redevelopment programs but now expects it will be limited to $250,000.

"This is money we thought we were allowed to run the Redevelopment Agency," City Manager Marjie Pettus said.

"A lot of cities are being limited this fiscal year" to $250,000, Ippoliti said. "That's a big difference."

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