Sausalito budget emerges amid uncertain revenues

The Sausalito City Council is wrestling with revenue uncertainty as it shapes its next budget amid a city leadership transition.

At the council meeting on Tuesday, Angeline Loeffler, the finance director, said the city would face a shortfall of $1.2 million to $1.7 million for its proposed $23.8 million budget for the fiscal year starting July 1.

The lower deficit figure involves no additional positions. The $1.7 million deficit would stem from filling one vacancy and adding support staff.

Loeffler said the budget gap is about $400,000 smaller than she reported in early May because of updated revenue figures from the county. But as-yet unknown receipts in some accounts presented the council with a quandary: whether to draw on existing city funds to start the year with a balanced budget and then allow the incoming city manager, Elaine Forbes, to review city staffing and spending.

Forbes starts on July 1, succeeding Chris Zapata, whose last day was Wednesday. The council appointed Assistant City Manager Brendan Phipps interim city manager on Tuesday.

"The city manager asked earlier how comfortable are we with using unassigned revenues," Mayor Steven Woodside said, referring to Zapata. "These are not reserves. These are beyond that. These are monies that are unallocated at this point."

Woodside was referring to $4 million in city coffers whose use is unrestricted, unlike other revenues. Another possibility was tapping funds that had been set aside for employee pensions and retiree health benefits.

"We must have a balanced budget," Woodside said, saying he would reluctantly draw on unassigned funds if needed. "Then our new city manager and our interim city manager are going to be looking immediately to make sure they're spent wisely and that they're monitoring the effectiveness of the new positions."

The council will continue to refine its budget in June, when it might hold three meetings. In the meantime, members of the council had questions about the basis for revenue projections and funding other needed positions, such as a staffer to speed applicants through the permit process. That post was not included in Loeffler's budget.

"Every single budget cycle we projected that deficit," Councilmember Ian Sobieski said. "And every single budget cycle for the past five years we've had a surplus. So, especially at this critical time, I want to be cautious about undermining our investment in the organization. But at the same time, the numbers tell the truth."

Loeffler reported fluctuations in various revenues. Parking fine collections were up. Sales tax was on par with projections. Hotel occupancy tax was up. Property taxes appeared lower - which Sobieski questioned. Loeffler said she would need to investigate and report back.

On the subject of whether to tap retiree funds, Councilmember Joan Cox urged the panel to resist that impulse because set-aside funds are positioned to manage those obligations for the next decade.

"Maybe I can calm down the tone in the meeting," Zapata said. "This is the second (budget) meeting. There's preliminary numbers. We're working on the numbers."

"There is obviously some concern about the economy that we are in and are facing, and so some of the projections are a little more conservative than you would like," he said. "But I think that's wise to not be aggressive in uncertain times."

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