Santa Rosa approves 4 percent spending increase in 2017-18 budget

Santa Rosa has approved a $385 million budget for next fiscal year that includes more money for the annexation of Roseland, the expansion of the city’s homeless shelter, and legal aid for tenants facing eviction.

But the budget passed unanimously Tuesday by the City Council does not pay for several proposals made by residents last month - such as funding a library in Roseland and free bus passes to students and veterans - out of a concern that the city faces future deficits.

Those trade-offs were regrettable but necessary to ensure the city focuses on its most pressing needs while recognizing its financial limitations, Mayor Chris Coursey said during last month’s budget study session.

“I think there isn’t a councilperson up here who wouldn’t love to fund a library in southwest Santa Rosa or provide free transit,” Coursey said. “(But) there’s the things that we have to do, and there’s the things that we want to do, and it looks like we’re having a hard time paying for the things that we have to do.”

The adopted budget is up 4 percent over the current year, and over the course of the coming year the city expects to spend about $6 million more than it takes in. Without future changes, that gap is expected to extend into future years, a situation referred to as a structural deficit. Those deficits are projected to increase in coming years and reach nearly $14 million per year by 2021.

The city is on track to end the year with reserves of $35.8 million in its general fund, the pot of money over which the City Council has the most direct control. Under the budget just passed, general fund spending is rising to $155 million and its reserves would drop to just under $30 million. That’s going in the wrong direction, but still above the 17 percent level the city’s considers healthy.

The department seeing the biggest spending increase on a percentage basis was Planning and Economic Development, which is seeing a 25 percent bump, to $10.4 million. The high workload from planning review and building permit requests, efforts to streamline the department’s processes and rollout of new cannabis regulations are all factors cited in the big boost in spending.

On the revenue side, property taxes continue to rise as a result of rising real estate values, adding $1.3 million to the city coffers - a 5.2 percent increase. Sales taxes are expected to increase by about ?4 percent next year, but because of a state accounting maneuver, it’s anticipated the city will receive 4 percent less than it did last year, translating to revenue of ?$49 million.

The concern about overspending was evident in the council members’ sharp critique of a plan to hire a communications and intergovernmental affairs manager with a starting salary range of $105,000.

Councilman Chris Rogers, who previously worked as a district representative for state Sen. Mike McGuire, expressed concern about the six-figure salary, which had been reduced from its previous level of $132,000.

“I still find it ridiculous to pay this position almost as much as the senators and assembly members that they’ll be working with,” said Rogers, who reiterated his belief that about $90,000 should do the job.

The council compromised by keeping the position unfilled until City Manager Sean McGlynn could return with a better justification for the new salary range.

Despite the thrifty talk, council members found ways to spend more money on issues important to them.

Tom Schwedhelm proposed spending another $250,000 beyond the same amount already being carried over from this year for new homeless services efforts.

That $500,000 would expand the city’s 50-bed winter shelter into what he called a “housing first” year-round shelter with additional staff focused on getting people into housing. That’s on top of the $2.2 million already in the budget for homeless services and affordable housing.

In addition, Julie Combs got her colleagues to agree to set aside $100,000 to continue funding for a county “safe-parking program” that gives people authorized and supervised places to sleep in their cars in the city.

Both those additions passed unanimously.

Combs also got $75,000 set aside for funding for a landlord and tenant mediation program and tenant eviction defense assistance, both of which she said were more important than ever given the recent defeat of the city’s rent control and just-cause-for-eviction measure at the ballot box. That motion passed 5-2, with Ernesto Olivares and John Sawyer objecting to paying for legal defense services.

The budget includes nearly 19 new or reclassified positions, bringing the total number of full-time employees to 1,284.

Nine of those new positions are related to the expected annexation of Roseland, including five police officers, two police dispatchers, a police sergeant and a fire inspector. The county Local Area Formation Commission takes up annexation of the five unincorporated islands in the city’s southwest on ?Aug. 2.

You can reach Staff Writer Kevin McCallum at 707-521-5207 or kevin.mccallum@pressdemocrat.com.