Santa Rosa presents $6.7 million general-fund shortfall; council weighs station closure, staff cuts and program reductions

Santa Rosa finance staff told the City Council on May 6 that the city’s proposed fiscal year 2025–26 budget shows $217.5 million in revenues and $224.2 million in expenditures and transfers, leaving a $6,700,000 general-fund gap for the coming year. City presenters said the draft already includes reductions that the council directed at a prior April study meeting, but that additional options remain to close the deficit.

The proposal and council discussion focused on a mix of built-in cuts and additional considerations. Built into the draft were staff reductions, contract adjustments and a placeholder for furlough savings. Staff said the package in the draft reduces general-fund staffing by 58.9 full-time equivalents (FTEs) and that, citywide after adding those positions funded by Measure H (see below), the net is a reduction of 38.9 positions. Of the 58.9 general-fund reductions, staff said 25 are sworn public-safety positions (12 fire, 9 police and others) and 33.9 are civilian positions. The draft also includes a $1.4 million pseudoline item for possible furlough savings that staff described as negotiable and uncertain.

Why it matters: the general fund is Santa Rosa’s primary operating account for police, fire, administration, parks and many community programs. The council must adopt a budget consistent with the city charter by June 1; staff asked for direction so the draft can be finalized for publication.

Key numbers and context - Draft FY25–26 resources (all funds): $517.7 million (citywide). - Proposed general-fund revenues: $217.5 million; proposed general-fund expenditures and transfers: $224.2 million; resulting deficit: $6.7 million. - Staffing reductions in the general fund: 58.9 FTEs (14 of those were acted on at midyear; 21 of the 58.9 positions are currently filled). Staff said these reductions translate to a citywide net loss of 38.9 positions after adding 20 Measure H positions funded by the new sales tax measure. - Public-safety share: police and fire account for about 63.8% of general-fund expenditures; salaries and benefits are roughly 77% of the general fund. - Reserves: staff reported reserves declined from roughly $88 million at the end of FY2023 to about $68 million at the end of FY2024.

Public-safety tradeoffs: blackout versus brownout A central, contested element of staff’s reduction package is a planned ‘‘blackout’’ of a fire company. Staff said the $6.7 million deficit in the draft includes closing (blackout) one fire company/station; staff presented a lower-cost alternative described as a ‘‘brownout’’. - Staff built $3,582,000 of savings from a station/company blackout into the draft. Staff said a brownout instead would produce about $950,000 of savings; that difference would increase the projected general-fund deficit unless other reductions are substituted. - SAFER grant risk: staff and the fire chief warned that a blackout could jeopardize the SAFER grant that funds 12 personnel assigned to advanced-life-support squads. Chief Scott Westro said the SAFER award is federal and tied to minimum staffing levels; losing a company could require negotiating waivers with FEMA and put the squads at risk. - Response-time impacts: the fire chief summarized an internal analysis showing systemwide effects if a company closes. He noted a long-term decline in meeting the council’s 5-minute response goal (e.g., compliance fell from ~76.5% in 2014 to ~60.8% in 2024) and estimated that a company closure would increase medicial/emergency response times on the order of roughly 8–10% and create a wider, citywide ‘‘domino’’ effect.

Police staffing and operations Police Chief John Cregan and staff described likely programmatic impacts of staffing reductions included in the draft. The department reported current sworn staffing near mid-80s and said the cuts shown would move staffing back toward historic lows (one staff chart in the meeting suggested a reduction to staffing levels last seen in 1998 if the proposed cuts proceeded). The chief listed likely program impacts, should the cuts be adopted, including fewer detectives, one fewer K‑9 team, fewer motor officers and fewer officers assigned to downtown enforcement, plus impacts to dispatch and field evidence technicians. The chief emphasized training and hiring timelines and costs: he estimated roughly $87,000 of direct cost for a police recruit’s 20‑week academy plus additional internal training and supervision that together approach $200,000 per new officer from application to independent patrol.

Other budget drivers and program-level options - Revenues: sales and property taxes are the two largest general‑fund sources. Staff said they reduced the sales‑tax projection by $5.5 million to align with recent economic outlooks. - Transfers out and one‑time changes: staff noted transfers out of the general fund (an example: Bennett Valley Golf Course receives a $500,000 annual transfer) and one-time items such as the pension obligation bond payoff that altered other-fund lines. Homeless services general-fund transfers rose in the proposal from $1.5M (FY24–25) to $3.6M (FY25–26) because ARPA funds that had been used to offset services have expired. - Measure H (fire sales tax): staff explained Measure H revenue will feed a new special-revenue fund; the draft shows 20 positions that the fire department plans to add and fund in that Measure H fund. Fire staff and the city attorney reiterated that Measure H is an ‘‘enhanced, non‑supplanting’’ sales-tax measure — it must be used to add services rather than replace general‑fund spending — and that county oversight and a citizens’ committee will review Measure H spending. - Enterprise funds: staff emphasized that enterprise funds (water, parking, etc.) have dedicated revenue streams and were not subject to the same general‑fund cuts.

Homeless services and community programs Housing and Community Services staff described a menu of potential reductions covering contracted homeless services and parks/recreation subsidies. They provided line-item examples totaling about $1,460,000 in general‑fund savings if the council chose them, including: annual cancellation of a $50,000 YWCA contribution; eliminating $60,000 for a tenant-assistance ‘‘Seasons of Sharing’’ program; reducing the host contract by $500,000 (the contract was described as approximately $1,035,000); reducing certain operating funding for Sam Jones Hall by $100,000; eliminating warming-center standby funds and ending safe-parking when the remaining encampment‑response grant funding is exhausted (staff said the grant could sustain safe parking through December). Staff warned some cuts — especially to outreach/host contracts — could slow the city’s recent progress on homelessness.

Parks and recreation and fees Staff identified roughly $927,000 of general-fund subsidy for recreation programs (swim center, sports programs, Howarth Park, contracted classes, senior center programming, traditional day camps). The parks deputy director said a gradual, program‑by‑program fee‑increase approach could recover more revenue and estimated, later in the meeting, that modest fee and staffing changes across recreation could approach $300,000 in additional revenue over time — an estimate staff said would not necessarily be realized during FY25‑26 unless the council adopted changes promptly.

Staffing, benefits and long‑term liabilities Human Resources and finance staff answered questions about vacant positions and long-term cost drivers. City HR reported about 61 current vacancies citywide; finance explained that the city’s CalPERS unfunded actuarial liability (UAL) payment is a fixed amortization schedule that does not shrink dollar for dollar as positions are laid off in the short term, meaning layoffs do not immediately reduce the annual UAL invoice. Staff also noted negotiated cost‑of‑living increases and an equity adjustment in the draft budget that offset part of staff reduction savings.

Preliminary council guidance and next steps Councilmembers asked detailed questions and provided preliminary direction at the end of the session rather than taking a final vote. Several councilmembers indicated they were reluctant to approve a blackout of a fire company; multiple members expressed preference for alternatives that rely first on attrition/retirements, deeper review of non‑public-safety reductions, or revenue measures (including fees or enterprise changes) before closing a company. Staff said they will return June with final adoption materials after incorporating council direction; staff also noted that the adopted draft must be published for public review per the city charter timeline.

Votes at a glance (other items during the meeting) - Bennett Valley Golf Course fees (resolution r e s 2025‑?): Council approved revised fees for Bennett Valley Golf Course effective July 1, 2025. Motion: Councilmember Rogers; second: Vice Mayor Alvarez. Vote: Rogers, Fleming, Benuelos, Alvarez, Stapp — Aye. Councilmembers O’Krepkie and McDonald — absent. Staff estimated the fee changes would generate roughly $150,000 in additional green‑fee revenue compared with the prior year; presenters said the course remains competitive and below some nearby rates. - Consent package (items 13.1–13.6): Council approved the consent items including a contract award for right‑turn improvements at B & 3rd, vehicle purchases under statewide contracts, grant applications for zero‑emission vehicle incentives, a surplus property declaration related to 0 Coffee Lane (APN 058‑033‑014), an MOU extension with Sonoma County probation for a violence‑prevention partnership, and acceptance of a public sanitary sewer easement and summary vacation at 5107 Middlebrook Court. Motion: Rogers; second: Alvarez. Vote: Rogers, Fleming, Benuelos, Alvarez, Stapp — Aye (O’Krepkie, McDonald absent). - Appointment: Council approved the mayor’s nomination to appoint the chair of the new combined Design Review and Preservation Board (nomination confirmed by majority vote). Vote: Rogers, Fleming, Benuelos, Alvarez, Stapp — Aye. - Letter of support (federal bill HR 2269): Council voted to approve a letter supporting HR 2269, a federal consumer‑labeling measure staff described that aims to clarify “flushable” claims on wet‑wipe packaging. Motion: Rogers; second: Fleming. Vote: Rogers, Fleming, Benuelos, Alvarez, Stapp — Aye.

Discussion vs. decision - Discussion points: staff laid out the draft budget, explained line‑item changes and potential tradeoffs, and supplied department‑level reduction options. Council members pressed on service impacts, reserves history, and alternatives to layoffs and station/company closure. - Directions given to staff (preliminary): council provided early guidance to staff to (a) avoid a blackout if viable alternatives exist, (b) prioritize attrition/retirements where feasible, (c) pursue fee increases (parks/recreation and other enterprise possibilities) and revenue measures where politically and operationally feasible, and (d) continue negotiating with labor about any furlough options and impacts. Staff said it would bring a final balanced budget and the required published draft back for adoption in June. - Formal decisions/votes: the meeting did not finalize or adopt the FY25–26 budget; the council took votes on non‑budget items listed above.

Speakers (attributions in this report come only from these identified speakers) - Veronica (Finance staff), Finance staff member, affiliation: government - Scott Wagner, Deputy Director of Finance, government - City Manager (unnamed in transcript), City Manager, government - Megan Basinger, Director, Housing and Community Services, government - Scott Westro, Fire Chief, City of Santa Rosa Fire Department, government - John Cregan, Chief of Police, City of Santa Rosa Police Department, government - Dominique Quonky, Human Resources Director, government - Jeff Tibbets, Deputy Director, Recreation and Parks, government - Brian Tickner, Chief Information Officer, information technology, government - James Burchall and Greg Anderson, Touchstone Golf (Bennett Valley operator), affiliation: business - Multiple councilmembers: Councilmember McDonald (recused earlier for parks item), Councilmember Rogers, Councilmember Fleming, Councilmember Benuelos, Vice Mayor Alvarez, Mayor Mark Stapp (votes recorded via city clerk). Note: several other staff and department heads spoke; the article quotes only those on the record.

Authorities and legal context cited in meeting - Brown Act / AB 2449 — statute referenced for remote participation disclosures - California Public Employees’ Retirement System (CalPERS) — long‑term liability discussion - SAFER grant (federal grant program) — cited as the federal award funding 12 squad personnel - Measure H — local sales‑tax measure (special revenue fund for fire) and related ordinance/oversight - ARPA (American Rescue Plan Act) — federal time‑limited funds previously offsetting homeless services - Council policy on transfers (Real Property Transfer Tax transfer policy) — cited in transfers discussion

Clarifying details (numbers and line items highlighted by presenters) - Draft general‑fund revenues: $217,500,000; expenditures/transfers: $224,200,000; deficit: $6,700,000. - Proposed general‑fund staffing elimination: 58.9 FTEs (14 acted at midyear; 21 filled), 25 sworn (12 fire, 9 police) and 33.9 non‑sworn; later described as net 38.9 citywide after adding 20 Measure H positions. - Fire Measure H: staff presented $8,800,000 anticipated revenue for the new fund and showed 20 Measure H‑funded positions in the draft table of organization. - Proposed blackout savings built into draft: $3,582,000; brownout alternative savings: ~$950,000. - Parks/recreation subsidy: approximately $927,000 of general‑fund subsidy across swim center, sports, Howarth Park, contracted classes, senior programming and camps. City manager estimated an approximate $300,000 in recoverable revenue could be realized over time through fee adjustments and internal changes. - Homeless services optional reductions identified: roughly $1,460,000 (examples: YWCA $50,000, Seasons of Sharing $60,000, host contract reduction $500,000, Sam Jones Hall $100,000, close safe parking after grant funds used).

Proper names mentioned - Santa Rosa City (official usage), Bennett Valley Golf Course, Measure H, CalPERS, SAFER grant, Sam Jones Hall, Caritas Center, Catholic Charities, Housing and Community Services, Touchstone Golf.

Community relevance and next steps The draft budget and the council’s preliminary direction set up a second day of public study-session discussion and public comment the next day (staff said the meeting would reconvene for further public input and final direction). Staff was directed to return with a public draft for the charter‑required publication and a final adoption item in June. Council members indicated a preference to avoid a blanket station/company blackout where possible, to examine attrition and retirements first, and to explore revenue measures and non‑public‑safety reductions as alternatives.

Ending Council members and staff emphasized the gravity and the multi‑year nature of the city’s fiscal challenge: even after the draft cuts, staff projected continued structural pressures in out years and said this would likely require additional discussions on revenue options or permanent structural changes beyond the coming year. The council did not adopt the FY25–26 budget at this meeting; it took votes on separate items (see the "Votes at a glance" list above) and asked staff to return with a final draft for publication and adoption per the charter timeline.