Sebastopol's empty coffers forcing tough choices

"The average shortfall, from the current year through fiscal 2033 is $2.9 million. That's the on-going gap that needs to be closed."

photo credit: Marc Albert/KRCB
Vacant retail shops and a weed strewn lot where a luxury hotel has been planned since 2015 aren't aiding Sebastopol's finances.

The coming decade will bring lean years to the city of Sebastopol and its residents, at least those depending on generous services and programs.

Don Schwartz is Sebastopol's city manager....

"My bottom line takeaway is that we have significant financial challenges, and it's not the economy," Schwartz said.

That's the short version of an hours-long presentation and discussion before the city council Wednesday night.

Bob Leland, a consultant for Baker Tilly, laid out the scope of the problem in detail.

He says the only reason the spending gap isn't larger, is because the city hasn't rushed to fill open positions on the municipal workforce.

"The average shortfall, from the current year through fiscal 2033 is $2.9 million. That's the on-going gap that needs to be closed. And, of course the shortfall could be curbed in the near term by higher vacancies, but only if you don't fill positions. And, if you don't fill positions then service levels will suffer," Leland told the council.

But even those predictions are only that.

Leland says the financial condition could significantly worsen if it must increase contributions to Calpers--the state retirement system,

Or if inflation again increases significantly or if cost of living increases for city workers exceed 2.5 percent.

Leland floated a number of options for bringing in more money and closing what's become a structural deficit.

These include: increasing the city sales tax by either a quarter-or-half-a-cent; leaving some city jobs unfilled; and raising the utility and or hotel tax.

Leland notes that because the way most revenue is split among jurisdictions, boutique lodging is the best path forward for Sebastopol.

"New hotels are probably the best form of economic development you can have because, on the property tax and the sales tax, you are just getting a portion of the total revenue, with the hotels, you get to keep it all," Leland said.

One has been planned and debated since 2015. Right now, its a vacant lot off the town square, adjacent to the Barlow.

Discussion of the city's long term financial needs and addressing the coming year's budget dragged late into the night.

The council opted to postpone two items to a future meeting: a $14,000 fee waiver for the annual Apple Blossom Festival, and a Gaza cease-fire resolution.