City Finances
I'm on the Budget & Enterprise 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.
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.
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.
Sebastopol's water comes primarily from the Russian River via Sonoma Water, supplemented by local wells. The city distributes it through aging pipes, many of which are decades old. The core financial question is whether current rates are sufficient to build the reserves needed to replace that infrastructure over time — or whether we're deferring costs to future residents and future rate increases.
The sewer system collects and treats wastewater before discharge. Like water, the infrastructure is aging and replacement is expensive. Regional treatment partnerships add complexity — Sebastopol shares a treatment arrangement with other jurisdictions, which means some costs are outside the city's direct control but still show up on your bill.
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.
Business Development
The Economic Gardening program connects Sebastopol's existing small businesses with serious market intelligence and business research — for free. It's one of the most effective business development tools available to a city our size, and most qualifying businesses don't know it exists.
What it is
Economic Gardening connects second-stage businesses (companies that have moved past startup but aren't yet large) with expert researchers who provide the kind of market intelligence that normally costs tens of thousands of dollars. Competitive analysis, market sizing, sales leads, GIS mapping, customer profiling — real tools, delivered by specialists.
Who qualifies
Sebastopol-based businesses with 6–99 employees and annual revenues between roughly $1M and $50M. The focus is on established businesses with growth potential — not startups, not large corporations. The program is designed for the companies that are already part of the local economy and want to grow within it.
Cost to the business
Free. The program is funded through the city's economic development budget. Participating businesses receive research and consulting services at no charge.
Why I care about this
Economic Gardening works by strengthening businesses that are already embedded in the community — not by recruiting outside companies with tax breaks. That's a more durable form of economic development. A local business that grows stays local. Its employees live here. Its taxes stay here.
If you run a Sebastopol-based business with 6 to 99 employees and revenues in the $1M–$50M range, you should at least have a conversation about what the program offers. The research they provide is genuinely useful — the kind of competitive intelligence that small businesses normally can't afford.
Application details and contact information are available through the City of Sebastopol. I'm happy to make an introduction — reach out directly.
Contact Phill →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.