Small towns in California are an endangered species. The combination of expensive state and federal mandates and regulations, rising costs of government, internet-based consumer spending, and limited revenue opportunities poses an almost insurmountable obstacle to survival.
It was not always this way. When I became involved in local government thirty-five years ago, charting a course towards a successful future was easier. The methods we relied upon were tried and true solutions that reflected a simpler world and had proven themselves effective in the past. These included fundamentals of boosting income and controlling expenses, making plans reflective of community priorities, and operating in a world that moved slowly enough that plans for the future were not quickly rendered obsolete. All that has changed.
When I was first elected to Sonoma’s City Council in 1994, the city found itself in a terrible mess. After the simultaneous departure of its City Manager of fourteen years and its external auditor, plus the hiring of a new City Manager and new external auditor, it was discovered that the city’s General Fund, after loaning the city’s Redevelopment Agency millions for failed development projects, was out of money. The new auditor spent six months investigating the city’s financial condition, and it was worse than terrible. We were broke. He made $41 million in adjustments to balance the books, discovered the city had violated its bond covenants, and uncovered twenty-one reportable conditions. With no reserves, the city had to open a line of credit with a local bank just to make payroll.
We froze salaries and hiring, stopped funding building maintenance and vehicle replacements, and with the help of a “blue ribbon” committee of local citizens developed a plan to rebuild the city’s finances. We hired a full-time finance director and imposed a set of procedural controls. Within twelve years, we had $8 million in reserves and stabilized our financial condition. Pulling off that sort of thing today is virtually impossible.
The world is nothing like it was in 1994; the pace of change has accelerated beyond the ability to plan. No sooner does a plan get made than it’s out of date. This is a result of both political and technological forces, both of which are tidal in effect, meaning they are beyond the control of any city, let alone a small one like Sonoma.
State mandates, for example, arrive fast and furious; legislation is poorly drafted, subject to political and cultural whims, and comes with a stick, not a carrot. Housing laws alone, fifty-three in 2023 and probably that many again in 2024, arrive constantly. Many are crafted by industry consultants and lobbyists and can only be implemented by hiring expensive consultants. No city, including Sonoma, has employees capable of doing the state’s bidding.
Meanwhile, the cost of government rises 4-5% each year, regularly outstripping revenues. The approval of a half-percent increase in local sales tax will do little more than cover the city’s $2.8 million General Fund deficit for a few years.
Sales tax revenue is not increasing fast enough. Consumers are buying goods on the internet and retailing, as evidenced by the increasing number of vacant store fronts in Sonoma, is tougher than ever. People want Affordable Housing, which requires government subsidies and provides minimal property tax; of that, the city only gets a paltry 14%. Hotel revenue is iffy, dependent upon the economy and visitor preferences.
We face a fundamental, perhaps existential challenge. Any ideas?
Context is so important here, and the City is lucky to have you (and others) who have given so much of your time and talents over the decades. Citizen involvement is vital if we are to continue. But what motivates civic duty is also changing. Government is messy at best, and those who are charged with doing the governing are facing threats not seen in generations. Passing the torch to the next generation is the best idea I can come up with. That, and for those of us who are veterans of the political arena, staying involved at the local level. Thank you for modeling how this is done!
Very informative summary Mr. Barnett. Just this morning we were discussing the local measures on the ballot and noting the reasonable need to address these issues but repelling at the idea of any more increase in the sales tax. The City needs to develop another source of revenue that does not increase the cost of living here on its residents.
What happens if a city goes bankrupt and the City Hall is shuttered closed? Have we already descended into a quiet feudalism where well paid lawyers quietly press “reasonable” arguments on the City Council for their pet development projects, while the voices of the neighborhood residents die in the wind of the doors at City Hall?
The phrase “neuroplasticity” has been coming across my event horizon with frequency of late and I wonder if perhaps being stuck in a particular point of view isn’t a form of conservatism. Can the imagination be untethered from a point of view to see reality differently and seeing that reality is in fact plastic may reveal new solutions. General Plan reviews probably should be preceded by an unvarnished, raw examination of as many unacknowledged assumptions underlying the decision making process. It might be the first step in finding another common point of view to work from.
As your column aptly illustrates, most days, the individual is under the same seismic shifts as the local government and there is NO WAY either problem will be solved through the current world religion—capitalism—which is, itself, undergoing a seismic shift back to feudalism. How many American politicians, like Mark Robinson in South Carolina, are making statements about how much easier life could be with a couple of slaves in-tow? As to “who will buy all these goods once most men and women are slaves rather than customers,” well, it always reverts back to “I got mine, fuck you.”
Its is hard to see how governments or any set of institutions can comes to grips with and address all fundamental change going on. I have never been so scared.