Rohnert Park projects $7 million shortfall through June, cuts to next year’s budget of at least $8 million

Rohnert Park anticipates a budget shortfall of more than $7 million by the end of June due to the financial effects of the coronavirus crisis while projecting an even larger drop in city revenues next fiscal year as it begins to develop a scaled-back spending plan.

The city is projecting a monthly drop of $2 million in its combined sales tax and hotel tax revenues while county and statewide shelter-at-home orders remain in effect, according to City Manager Darrin Jenkins, plus the possibility of smaller payments — or none whatsoever — from Graton Resort & Casino just outside of the city.

Altogether, the slide in revenue amounts to a 16% hit to Rohnert Park’s general fund in over three months.

“This is unlike any other emergency or disaster. We still don’t really know the length and the depth of this crisis and pandemic and economic slowdown,” Jenkins told the City Council by virtual meeting last month. “We need to understand what we’re dealing with, and we’re working on that.”

Even so, he likened the forecasting to flying blind while approaching the eye of a storm. The initial spending plan presented to the council would cut more than $8 million from the general fund, equating to a nearly 20% reduction from the current year’s budget.

More than half of next year’s general fund spending — $19 million — would be dedicated to the city’s Department of Public Safety, which provides police and fire services. That funding level represents a 1.6% increase from the current year, leaving other departments to hold the line on spending.

“We’ve got the staff in public safety up to where we need them,” said Councilwoman Pam Stafford. “We don’t want to lose any employees. It’s too hard to replace people.”

The city maintains about $14 million in reserves. Under the initial plan, it would aim to spend less than 1% of those funds over the next fiscal year.

To slash spending, the city would defer maintenance on roads and postpone other facility projects, as well as delay scheduled upgrades of technology and vehicle replacements.

Jenkins also expects to achieve payroll savings from jobs that are vacant amid regular employee turnover. No hiring freeze is planned, nor are layoffs, he said.

The City Council will host a second budget hearing toward the end of June as it looks to adopt its new spending plan based on the most up-to-date information on city revenues during the ongoing pandemic.

“I kind of jokingly say that it should be written in disappearing ink, because everything is tremendously uncertain,” Jenkins told the City Council last week. The new budget will take effect July 1.

In the meantime, the City Council last month took action to halt some spending and apply reserve funds to begin filling the more immediate $7.2 million shortfall. The council voted 5-0 to make available $2 million held in reserve from past payments to the city by Graton Resort & Casino, as well as suspend infrastructure projects, vehicle replacement and other spending with reserve funds through June to make up the difference.

Rohnert Park did get good news last week that the Federated Indians of Graton Rancheria, which owns the nearby casino, intends to make its regular, quarterly payment of $2.4 million to the city, according to Greg Sarris, tribal chairman. That money will either go to backfill spending from the city’s casino reserve fund or could be used to offset other costs in next year’s budget.

The casino closed its doors in mid-March, and it’s unclear if the city will receive any more of the guaranteed quarterly payments until it is able to reopen and begin generating revenue. The tribe hopes to continue meeting its financial commitments, however, and is already exploring a plan that could see the casino reopen as early as June, Sarris said.

“I think we need to pretend the worst-case scenario on that. We may not get it for a while, and that’s really going to be devastating,” said Mayor Joe Callinan. “We need to make sure that we’re really watching every dime. We’ve got our work cut out for us, and I know we’re up to the task.”

You can reach Staff Writer Kevin Fixler at 707-521-5336 or kevin.fixler@pressdemocrat.com. On Twitter @kfixler.