Fiscal clouds in Sonoma County

Santa Rosa Press Democrat

December 29, 2010

PD EDITORIAL

The past 18 months will go down as one of the worst periods in history in terms of the toll taken on municipal budgets in Sonoma County.
The city of Petaluma has seen the size of its general fund budget shrink from $44 million to about $34 million. Santa Rosa city officials have been forced to trim $26 million from a general fund of roughly $125 million, while Sonoma County supervisors have made $21 million in cuts from a general fund of $400 million.
This coming year is not expected to be much better for most communities. The county is looking at another $30 million in cuts while Santa Rosa officials are facing another deficit of $8 million to $10 million.
But the city Petaluma is in a different place. It faces the possibility of entering a new fiscal new year deficit-free.
City Manager John Brown gave the City Council this encouraging news last week. Thanks to some concessions by city employee unions, the city may be able to resolve its $2.9 million shortfall over the next 18 months.
The unions, including those representing police and firefighters, have tentatively agreed to a furlough plan that would have employees taking 96 hours of unpaid time off over the next 18 months. This would amount to a 3.1 percent cut in income, although the base pay of employees would remain unchanged.
After Brown's announcement, Mayor Pam Torliatt rightfully thanked the city employees for these concessions. “By doing this ... you are all going to benefit from it as a whole because someone won't be laid off,” she said. “I appreciate you working together. This is more like a family because of that.”
These agreements would certainly go far in helping the city get through a difficult time. But this plan is not without risk to the family.
For example, these income cuts would be temporary. This means that employee pay would revert back to current levels in June 2011 even if city revenue levels don't bounce back. And there's good reason to doubt they will.
Second, flexible furloughs are one way to reduce labor costs, but not if it means having to pay overtime to replace staff members who are taking unpaid time off. Juggling furloughs without paying overtime can be particularly challenging for police and fire departments.
It also shouldn't be forgotten that furloughs take a toll on city residents and businesses who are forced to deal with a reduced level of service from the city. Ask anybody who has wanted to check out a library book or needed to visit a county office over the past week.
Finally, City Manager Brown noted that as a result of this year's budget cuts, Petaluma is entering the new year without any reserves — a situation that is not likely to change this coming year.
This puts the city in a very risky financial position. In effect, it means the city is allocating reserves to ongoing labor costs, which account for 80 percent of the general fund. Bad idea. While things may get better in the months to come, they can always can get worse.
If the past 18 months have taught us anything, it's that.