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Healdsburg OKs budget with $808,000 deficit

Healdsburg has managed to trim its budget, cutting its workforce and obtaining concessions from employees. But the red ink keeps on flowing.

The City Council on Monday approved a $7.9 million general fund budget for the upcoming fiscal year that includes a projected deficit of $808,000 that will be covered by the city's reserve fund.

Councilman Tom Chambers called the gap "pretty scary."

"We're still a far cry from balancing the budget. We will have a lot of tough years ahead," he said.

"Everyone is suffering," he said of the impacts to employee salaries and public services.

Healdsburg has $4.5 million in its general fund reserve, which serves as a "healthy" cushion, in the words of Councilman Jim Wood.

But projections are that the reserve fund could run dry by mid-2016. The City Council tentatively has approved asking voters to approve in November a half-cent sales tax increase to help ease the shortfalls.

The 2012-2013 projected deficit comes on top of a $384,000 gap between revenues and expenditures in the current fiscal ending June 30.

The deficit for 2011-2012 had been predicted to be nearly $1 million but turned out smaller, thanks to a unexpected surge in sales and bed tax revenues.

But city officials also are bracing for the possibility they may have to pay the state as much as much as $600,000 that was used to administer redevelopment programs after Gov. Jerry Brown and the Legislature abolished redevelopment agencies earlier this year.


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