Sebastopol adopts budget, residents decry sewer fund loan

After some last minute drama involving the transfer of money between different city accounts, elected leaders in Sebastopol approved a new budget this week, with a few economies.

The city of roughly 7,500 residents has been projecting a rising tide of red ink that officials warn will eat through financial reserves in a handful of years. Officials are hopeful local residents will approve a sales tax increase in November and that a long awaited hotel will one day ease the revenue crunch.

The approved 15 million dollar spending plan taps about $700,000 of reserve funds and makes a number of economies, including trimming 20,000 dollars from the city manager's budget for financial analysis.

But it was word that the city's general fund would extend a million dollar loan to the city's water and sewer fund that drew the ire of a handful of residents, including a man who identified himself as Robert. He and other speakers accused officials of transferring funds from the water account to the general fund in the past, and took umbrage with plans to send the money back in the form of a loan, with interest.

"I told you guys two years ago that you had a crisis in the sewer fund and that it was gonna create a massive deficit that would require you to borrow money. For two years you ignored that! You didn't act on that, you did nothing, you did no rate studies, you did nothing! And, it's not the fault of ratepayers that there is a million dollar loan, it's the fault of the city council members and the people who set the agenda and maybe the city manager at the time who is no longer with us for the reason this loan has to be made, and there's no way in the world you should be charging ratepayers interest on this money," said a man identified as Robert who did not provide his last name.

Commenters, including two who hinted at lawsuits, spoke before councilmember Sandra Maurer floated making a direct payment and nixing the interest charges.

"I am not comfortable charging our residents an interest on a loan. I would like to have no interest."

The council ultimately agreed.

According to a report prepared for the council, the budget will leave the city with a projected year end balance just shy of $3 million.