City Revenues on Track for Scaled-Back Budget Year; Programs to Support Local Economy Expanding

Posted on October 29, 2020

Parklet example

The first quarter financial report for the fiscal year shows City revenues on track to meet or slighlty exceed the scaled-back projections incorporated into the annual operating budget, which began July 1.

The FY 20-21 budget is based on General Fund revenues of $17.2 million, or almost $3.3 million less than the adopted budget for the prior year. Most of the projected revenue losses are from lower sales taxes and hotel taxes, which have been significantly impacted by the pandemic. To balance the budget, the City Council approved more than $1.1 million in spending reductions and use of $2.1 million in financial reserves.

Preliminary revenue data for the first quarter shows that transient occupancy tax (hotel tax) revenue is running at only 45% of the amount received in the same quarter of 2019. However, this exceeds the conservative scenario used in the budget which assumed a very slow reopening “ramp” for lodging facilities. Sales tax is also estimated to slightly exceed projections, due to increased online purchases.

While it is too soon to identify revenue trends for the coming months, the City’s efforts to support the local economy continue at full speed. The Sonoma Al Fresco program, which helps businesses to temporarily increase their outside service options to accommodate COVID-19 related health standards, has been expanded to include parklets, with the City providing financial support for traffic safety devices as well as reimbursement of up to $1,500 for parklet beautification.

The Sonoma Valley Safe program, rolled out with local business organizations, supports local businesses in taking the necessary steps to follow health guidelines, as well as communicating that Sonoma Valley is committed to maintaining the highest safety standards to protect the health of employees, visitors, and our community.   Additional support for holiday retail marketing and “Shop Sonoma” efforts are also underway.

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