City Finances · Budget Season 2026–27
I'm on the Budget & Enterprise Committee and founded the Enterprise Fund Oversight Committee. I think every resident deserves to understand where city money comes from, where it goes, and what the risks are. Here's my best attempt at that.
The Financial Story — FY 2026–27
Annual Revenue
$15.6M
General Fund — FY 2026–27
Annual Spending
$16.6M
$613K is deliberate infrastructure investment
Reserves
$4.27M
25.8% of budget · Goal was 20%
Roads Investment
$613K
Measure U pavement program FY 2026–27
FY 2025–26 ended with an estimated $478,000 surplus — primarily from salary savings during vacancies and deferred projects. That money goes into our reserve fund, not into new spending.
Our reserve fund now stands at $4.27 million — 25.8% of annual expenditures. The city's policy floor is 15%. Our stated long-term goal is 20%. We're above both. That cushion protects us from economic shocks and gives the Council real flexibility.
The FY 2026–27 budget projects a $960K operating deficit. About $613K of that is the Council deliberately directing Measure U revenue into pavement and infrastructure rather than operations. That's not a structural failure — that's choosing to fix roads now instead of deferring maintenance again.
The remaining gap is driven by public safety staffing costs and pension obligations — cost pressures every small California city is navigating.
Better roads and sidewalks make downtown more accessible. A stable water and sewer system protects public health and property values. Economic Gardening helps local businesses grow — and a growing business pays more sales tax. The two-way street conversion supports more foot traffic and retail activity. Every one of these is both a quality-of-life investment and a long-term fiscal strategy — because a more vibrant city generates more revenue, which gives us more to work with in every future budget.
Explore the full interactive budget dashboard →Budget Basics
Most cities have two separate money buckets that do not mix. Sebastopol is no different. Understanding the difference between them is the key to understanding most budget conversations.
General Fund
The General Fund is what most people picture when they think of a city budget. It pays for the services that don't have their own dedicated funding source: police, parks, street maintenance, planning, city administration.
Where the money comes from: Property taxes, sales taxes (including local measures like Measure U), business license fees, and state subventions. The city doesn't control the rates on most of these — it's largely a price-taker on revenue.
The constraint: The General Fund is structurally tight. Rising pension costs (CalPERS), inflation in labor and materials, and slow revenue growth create ongoing pressure. There is no large discretionary surplus available.
Enterprise Funds
Enterprise funds are run more like businesses. They charge rates for a service, and those rates are supposed to cover the cost of providing that service — including long-term infrastructure replacement.
Sebastopol's enterprise funds: Water and wastewater (sewer). Your water bill and sewer fee go directly into these funds — they cannot be used to pay for police or parks.
Why this matters: If the enterprise funds are underfunded, the city can't borrow from the General Fund to cover it. Rates have to go up, or infrastructure goes unreplaced until it fails. This is a very real fiscal risk in small cities across California.
Budget Update
We are coming in far better than expected for the last budget year — putting over $900,000 into our reserve fund. Our reserves will sit at 35% of budget, well above our stated goal of 20%.
That cushion gives us the ability to build infrastructure, move toward full staffing, and make real investments in our city without borrowing against future residents.
Reserve Fund
35% of budget
Goal was 20% — we exceeded it.
Added to Reserves
$900k+
Surplus from the last budget year.
Enterprise Funds
Your water and sewer bills aren't just utility payments — they're the financial lifeline of two of the city's most critical infrastructure systems. Here's what's actually going on under the surface.
The Enterprise Fund Committee has met 6 times and is now submitting its report. Full Water and Sewer master plans will be complete by end of summer. The good news: our system is better documented and in better health than expected — no major repair emergencies on the horizon, and a completely doable 10-year project list to bring the system to top shape.
The sewer system collects and treats wastewater before discharge. Like water, infrastructure is aging — but the master plan review has found the condition to be manageable. Regional treatment partnerships with other jurisdictions add cost complexity, but the system is sound. The 10-year capital plan will prioritize the highest-impact projects first.
The key question I ask on the Budget & Enterprise Committee is whether rates are structured to fund infrastructure replacement over the long term — not just to cover today's operating costs. A system that's financially balanced today but not building reserves is a system heading toward a crisis. We do regular rate studies to check this, but translating them into decisions requires political will.
Small California cities face a structural challenge: infrastructure was often built in the same era (1950s–1970s), which means replacement cycles hit simultaneously. Climate change adds pressure — drought affects water supply, extreme precipitation stresses sewer systems. Being on top of this financially is not optional. The consequences of underfunding are pipes that fail, boil-water notices, and rate spikes when deferred maintenance can't be deferred any longer.
Supporting Local Business
Economic Gardening is our commitment to making sure every Sebastopol business feels connected — to city hall, to resources, and to each other. We want to be genuinely business-friendly. That means being reachable, being useful, and showing up. Is your business having a birthday? Hitting a milestone? Running into a wall? We want to know.
What Economic Gardening means here
It's not a bureaucratic program with a checklist. It's the idea that the best economic development happens when we invest in the businesses already rooted in our community. A local business that grows stays local. Its employees live here, shop here, coach Little League here. That's why your success is our success.
Direct connection to city hall
You shouldn't have to navigate a maze to get a straight answer from city government. If you're dealing with permitting, signage, zoning, a licensing question, or something else that's slowing you down — reach out directly. I'll connect you to the right person or work through it with you.
Resources & support — free
Through the Economic Gardening program, Sebastopol businesses can access market research, competitive analysis, customer profiling, and business strategy support — at no cost. City staff can help facilitate. You don't have to figure it out alone.
Connection to other local businesses
One of the best things we can do is help local businesses find each other. Referrals, collaborations, shared resources — a stronger business community is better for every business in it. If you're looking to connect, let's make that happen.
Whether you're just starting out, celebrating a milestone, hitting a rough patch, or looking to grow — reach out. Tell me about your business. There's no form to fill out first.
Is your business having a birthday? Let's celebrate it. Sebastopol is a better place because you're here.
Reach out directly →We're also recruiting
We're a great jumping-off place for West Sonoma County — but we want to be more than a pass-through. We're looking for businesses that make Sebastopol a year-round destination, not just a weekend stop. That means filling real gaps in our local economy and building an identity that goes beyond seasonal tourism.
Actively Seeking
Sonoma County has a rich base of food & beverage producers, specialty goods makers, and light industrial businesses. We have space, we have infrastructure, and we have a community that values making things locally. If you're looking for a home, we want to talk.
Building Toward
Tourism is great — but tourism is seasonal. We're looking for businesses, industries, and employers that bring economic activity in January, not just July. If your business could thrive in a small, connected Northern California city, Sebastopol deserves a serious look.
What We Offer
We sit at the crossroads of the Sonoma Coast, the Russian River, Bodega Bay, and the broader wine country. The customers are here. The workforce is here. The quality of life that attracts talented people is here. We just need more reasons for them to stay and spend locally.
Thinking about locating or expanding in Sebastopol?
Tell me about your business. I'll personally make sure you get connected to the right people at city hall and that we're putting our best foot forward to welcome you.
My Position
I'm on the Budget & Enterprise Committee. Here are the things I push on every budget cycle — not as politics, but as the financial obligations I think the city needs to take seriously.
The single biggest long-term fiscal risk in Sebastopol is infrastructure that needs replacement before the money is there to replace it. Every year we underfund reserves is a year we're pushing costs onto future residents. I push hard for rate structures and reserve policies that close this gap now, while the pain is manageable.
CalPERS pension costs are the largest structural pressure on the General Fund. The unfunded liability is real and growing. I want the city to be honest about what this costs over time — not just in the budget year, but over a 20-year horizon — and to make staffing and service decisions with that context in view.
Sebastopol's General Fund is more dependent on sales tax than most cities our size. Sales tax is volatile — it dropped sharply in 2008–09 and again in 2020. Economic Gardening, downtown vitality, and the transportation conversion are all, in part, fiscal strategies: more active downtown businesses mean a more stable revenue base.
A city budget document that requires a finance degree to parse is not actually transparent — it's just technically available. I'm working to make budget materials more legible to residents: plain-language summaries, accessible charts, and a process that invites genuine public input before the budget is adopted, not just ratification after the fact.
Local Ballot Measure
Measure U
Measure U is Sebastopol's local sales tax measure. It generates revenue specifically for the city's General Fund — money that would otherwise not be available for local services. At the scale of a small city like Sebastopol, the difference between a healthy General Fund and a structurally deficient one can be measured in police officers, park maintenance, and the speed at which infrastructure issues get addressed.
Why fiscal responsibility matters here: Small cities are fragile in ways that large cities are not. We don't have the ability to run deficits across multiple departments and absorb them with future growth. When costs outpace revenue, the only options are service cuts, rate increases, or deferred maintenance — all of which are essentially taxes on future residents.
My position: Measure U revenue should be used transparently and for its stated purposes. The council should be accountable to voters for how it's spent. And the city needs to do the hard work of aligning ongoing expenditures with ongoing revenue — not just using one-time sources to paper over structural gaps.
Specific current details on Measure U rates, sunset dates, and how revenue has been allocated are available in the city budget documents linked below.