City budget maintains 36% budget reserve; sets money aside for infrastructure, bus program
Cloverdale’s budget for the 2019-20 fiscal year was approved in a 3-1 vote on June 12. The budget, which outlines the city’s general fund, water operations, sewer operations and airport operations, has a total operating revenue of $16,860,359.
The council was presented with two possible budgets, one that included money allocation for three additional parks staff members and one without additional staff.
As it stands, the council approved the budget without money for additional parks staff that results in an estimated ending June 2020 general fund balance of $3.08 million. With the approved budget, the city will be operating at a deficit of $365,926. This puts the city at a general fund reserve of 36.4%, which is well above the set council policy of a 25% reserve.
The second budget that was presented included three additional staff positions, and left the June 2020 general fund balance at an estimated $2.9 million, raising the operational deficit to $542,703.
During a budget workshop on May 14, City Manager David Kelley stressed the importance of maintaining a reserve that hits above the 25% mark.
“The message to council that I was trying to convey is that there are a lot of things that aren’t currently in the budget,” he said.
By maintaining a higher reserve, Kelley said that the city will be better prepared when faced with unexpected financial expenses. He also said that, when putting together this year’s budget, there are some things in the works that don’t have solid costs associated with them — like labor negotiations that are currently in process, or the possibility of changing the ground covering in city parks.
According to the Finance Director Susie Holmes, the 2019-20 budget is similar overall to the one approved for 2018-19, though it includes increases in both expenses and revenue.
The initial budget was presented and approved in a 3-1 vote with Mayor Melanie Bagby, Vice Mayor Gus Wolter and Councilmember Mary Ann Brigham in favor, and Councilmember Jason Turner voting against. Councilmember Marta Cruz was absent.
At the time of voting, Turner indicated that he voted against the resolution to accept the proposed “Budget Version 1” because of the absence of Cruz, as well as the absence of Public Works Director Mark Rincon, who was requesting funding under the second version of the budget, which would give the Public Works Department more money to hire employees.
The majority of the councilmembers initially expressed hesitation when it came to voting on the budget without Cruz, however a timeline reminder from Holmes seemingly led to a shift in opinion — she recommended the council vote during the meeting, since the budget has to be finalized by July 1 in order to avoid having to file a budget continuation.
While the council approved the first pass of the budget without additional staffing, additional staffing can still be considered during the 2019-20 mid-year budget review.
For the community
Building on last year’s budget, this year’s general fund includes money allocated to local organizations and nonprofits. According to Kelley, prior to the Great Recession the city provided some funding to local organizations. However, when the economy took a dive, the city was forced to cut back and only focus on its basic needs.
Last year, the council was able to allocate one-time funding to help the Cloverdale Performing Arts Center get a new roof, as well as give money to the Boys and Girls Club of Cloverdale and the Cloverdale Senior Multipurpose Center (to help offset the time that Executive Director Rebecca Ennis spends as the head of Health Action).
This year, the budget is on a similar giving path, albeit with more money allotted to more organizations. In the general fund budget for this year is $1,000 for the Cloverdale History Center; $10,000 for the Boys and Girls Club of Cloverdale; $10,000 for Health Action; $10,000 for the Cloverdale Senior Multipurpose Center; and $61,175 for the Cloverdale Chamber of Commerce.
“Really starting with last year’s budget, where we’ve had a healthy reserve balance the council has felt the desire to increase funding to nonprofits,” Kelley said.
Included in the money is also $12,000 to help subsidize Sonoma County Transit’s free fares program in Cloverdale. The free fares program has been popping up in cities around the county for the past year. Kelley said that the first year of the program will serve as a “pilot program to see how it goes.”
Investing in improving infrastructure
According to Kelley, also included in this year’s budget is $250,000 allotted to updating part of the city’s master plans and updating city infrastructure. This in part is to better prepare the city for the onslaught of development that’s coming to fruition on the south end of town.
While money is designated to go toward infrastructure projects, Kelley said it “is probably a good yearlong effort, and we may be well into the next fiscal year.”
“The budget is supposed to be a living, breathing document,” Kelley said.
As such, with any budget, additional funding requests and budget amendments may come forward through this next fiscal year.
This year’s budget will also be somewhat of a learning process when it comes to revenue prediction.
Holmes said that, included in the revenue are two revenue channels that the city will be watching: the revenue from the city’s cannabis tax, as well as Measure M, a countywide tax from the Sonoma County Regional Parks Department. Since both taxes are relatively new to Cloverdale, the city needs to watch how the numbers develop in order to formulate a sound prediction of how much money they will bring in.