The all-pervasive nature of the ongoing recession and ever-worsening state budget crisis is evidenced by Sonora’s fate.
Historically, the city has been like Switzerland, a fiscal rock seemingly immune to the financial winds that have buffeted the counties, schools and special districts around it. City government has been responsible, conservative and solvent. Look at a graph mapping past municipal income and expenditures, and there’s either no gap or there’s daylight in the form of annual surpluses.
Constituents, in fact, have so trusted the Sonora City Council and staff that they in 2004 voted in a sales tax hike to bolster police and fire protection. And last year, they approved an increase in the city’s hotel-motel tax.
Remember Bell, the corruption-ridden Southern California city that squandered taxpayer funds by paying its administrators and councilmen scandalously high salaries? Well, Sonora has been the anti-Bell.
But, despite its exemplary record, the city is now hurting — which shows that even the most efficiently run governments are not immune.
Property and sales tax revenues are down, deficits of $598,000 and $434,000 have marked the past two fiscal years, and Sonora has chewed through half of a once-handsome $2 million reserve fund to balance its budgets.
This year isn’t any easier: First-year City Administrator Tim Miller estimates the 2010-11 deficit could reach $500,000. Next year, depending on Gov. Jerry Brown’s budget and on the outcome of a June election on extending taxes, the hole could be even deeper.
So far, Sonora hasn’t had to resort to furloughs, layoffs or pay cuts to make ends meet. In fact the city still pays all its employees’ health insurance and retirement costs in full — although workers know this perk may not last forever.
In contrast, Tuolumne County has imposed unpaid days off and shortly will bill workers for their share of payments into California’s Public Employee Retirement System.
Sonora has survived largely by dipping into its reserves. But the $1 million remaining represents about a quarter of its annual general fund expenditures and is a financial line in the sand Miller doesn’t want to cross.
The administrator has so far trimmed about $100,000 from the current year’s deficit through policy changes, reduced hours and eliminating part-time employees. More has been saved by not replacing departing employees, such as Community Development Department Director Ed Wyllie.
Some of the pain is trickling down: Fire Department staffing has been reduced during low-call hours and during some early morning hours only one police officer is on duty.
On the plus side, sales tax revenues from the just-opened Lowe’s store will soon come the city’s way, as will income from the soon-to-be expanded Wal-Mart. But, said Miller, that is still many months away.
So tough decisions are ahead.
The city’s nearly 40 employees have forgone cost-of-living raises for the past two years, but are in line for a 3 percent hike this year. But that and city payment of retirement and health benefits may soon be on the block.
“I’d prefer concessions to furloughs or layoffs,” said Miller, whose admission that his first year on the job has been “challenging” may be an understatement.
But his strategy for surviving the current hard times is time tested: “Live within your means and grow the local economy.”
Sonora’s taxpayers can’t ask for more than that.