Cloverdale faces deficit with loss of redevelopment funds

Cloverdale's budget has reached a new low after struggling for years with the recession, coupled with a more recent loss of redevelopment funds.

City Council members were advised last week that the end of redevelopment has created a "structural imbalance" that will cause a projected $267,000 deficit in next fiscal year's $5.7 million general fund.

With barely any reserves, and after cutting staff by 25 percent over the past five years, city leaders say the hit is tough.

"For a small city like us, it's sizeable. It's quite a bit of money," Councilwoman Carol Russell said of the loss of redevelopment funding totaling $430,000 this year. "We're down to bare bones."

The City Council directed Interim City Manager Paul Cayler to look for potential savings as well as ways to increase revenues, ranging from tax hikes to fees for service, franchise agreements and grants.

More layoffs don't seem to be realistic to city leaders.

"I don't see reduction in staffing as an option any more," said Mayor Joe Palla. "There's no way the city could provide the most basic services if it reduces staffing."

Cayler will review the police budget, which he said accounts for about 70 percent of the general fund budget.

But the police department is already running relatively lean after cutting four positions in the past few years. It's now down to 13 sworn officers, including the chief.

Overall, the city's work force has been reduced to 39 employees from more than 50 at one time, and there have been no raises in five years. City Hall is closed on Fridays.

Cayler said redevelopment money partially funded a number of salaries at City Hall, including for the city manager, community development director, finance director and city clerk, because they had some redevelopment duties.

"The loss of redevelopment puts us in a very difficult spot," Cayler said, adding that it is hard to deal with "slivers of people" when reducing payroll.

Located at the northern end of Sonoma County, the city of 8,665 population has relatively small proportion of sales taxes and hotel bed taxes to rely upon.

General sales and use taxes increased slightly more than anticipated this year along with business-related taxes.

But property taxes are down about 20 percent from five years ago. The most recent figures won't be known until September.

"As we see property values start to go up we will start to see some signs of relief," Mayor Palla said. "I don't think it will be in the next year or two. I don't anticipate it will go up to where we were before the recession hit."

The bottom line is that there is only a $84,000 general fund balance projected at the end of the current fiscal year. The next five years the deficit is projected to grow steadily every year, reaching $2.3 million in 2017-18.

One possibility for increasing revenue could be re-enacting a utility user fee which the city allowed to lapse a number of years ago. But that will require a ballot measure and voter approval.

"We're all pulling together to try and work together to come out a better city," Palla concluded. "We can't fund what we don't have the money to fund."

You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com