In a budget-cutting move, the City of Petaluma is disbanding its Community Development Department. After slashing the department from 23 to 11 employees in September 2008, the City Council in April voted 4-2 to lay off all remaining planners, including the community development director.

On the recommendation of the city manager, Petaluma's building department will become a stand-alone entity, the police department will assume responsibility for code enforcement, and the geographic information systems (GIS) manager will move to the information technology division. As of July 1, however, the city will employ no planners.

"Community Development as it's comprised now will evaporate," said Mike Moore, the department director for nine years.

The City Council voted to disband the department without a clear strategy for handling the planning and land entitlement functions.

"I'm still working out a transition plan with the city manager," Moore said in late April. "I'm not sure what's going to happen with advance planning, and I'm not sure what we'll do with all the functions we have that are not entirely cost-recoverable, such as handling the counter."

Mayor Pam Torliatt said in an email the city is "not eliminating our Community Development Department." She declined to elaborate and directed questions to City Manager John Brown, who conceded he is still working out a plan that will likely rely on laid-off planners returning on a part-time, hourly basis.

"I'm going to try to maintain the existing staff on a cost-recovery basis for as long as I can, so that as long as there are projects, we have someone to process them," Brown said. "What I'm determining right now is how little management I can get away with and still have a functioning department."

At the beginning of the 2008-09 fiscal year, Petaluma created the Community Development Department its own enterprise fund. Except for a general fund subsidy of $370,000 for administrative costs and code enforcement, the department is expected to generate all its own revenue through fees. Less than two months into the fiscal year, it became obvious that fee revenues were inadequate, which led to last September's layoffs and a reduction in services such as counter coverage and public access to staff members. Seven months later, Brown reported the department's revenues though April 8 were $988,000, while its enterprise-related expenses were $1.274 million, for a deficit of $286,000. A lack of fee-paying development activity created the hole, Brown explained.

During a transition period through end of the fiscal year on June 30, "staff will evaluate three options," Brown wrote in an April 13 report to the City Council. "Privatizing current planning functions; contracting for these services from another public agency; and exploring a model that duplicates a private contract but which is delivered using the existing group of permanent, part-time and contract planning staff."

The decision to disband the Community Development Department has been the talk of the town – not surprising considering the Sonoma County city's history of land use activism. In 1972, Petaluma voters became the first in California to adopt a growth control ballot initiative, which limited residential development to 500 units a year. Voters rejected subsequent attempts to overturn the building cap, and in 1998 they approved a fairly tight urban growth boundary. Development proposals typically receive intensive public scrutiny, and a recent comprehensive general plan update took no less than eight years to complete. The seven-member City Council is often characterized by members' disposition toward growth.

Some people view the disbanding of the Community Development Department as an extreme measure to slow growth. Jack Balshaw, a former councilman, co-author of the 1972 ballot measure and a Petaluma Argus-Courier columnist, described the decision as a "power grab [by] the environmental bloc on the City Council." Without professional planners on board, the City Council may interpret the general plan as it pleases, Balshaw wrote.

Local developers and development representatives declined to speculate on the move's potential impact. Attorney Kathleen Miller, who chairs the Petaluma Planning Commission, said the move could slow growth tremendously but said she hoped that was not the council's motivation.

"Petaluma already has a reputation for being a place that's difficult to get projects approved and developed. This is sort of another roadblock," said Miller, who recognized the city's fiscal constraints. "Most jurisdictions seem to be laying off some personnel, and not eliminating entire departments."

"I'm very concerned about how they are going to handle everything from getting a fence permit all way up to processing major subdivision applications," Miller said.

Vice-Mayor Teresa Barrett said her only motivation was balancing the city's tenuous budget. "I see this totally as an interim measure," she said. "I'd like to see an in-house planning department like we have now. I've always been a proponent of that."

Councilman Mike Healey voted against Brown's recommendation, but only because he "felt there was enough work coming through to keep the one associate planner on board." He suggested an overhaul of the planning process might actually make development easier.

"Petaluma has managed to develop in recent years a reputation as a place a sane person wouldn't want to develop in," Healey said, citing individual project reviews that have lasted five years. The city now has the opportunity to design a process that is more predictable, swifter and still open to the public, he said.

"Obviously, this is driven to a big degree, although not as much as some of my colleagues like to think, by the national economy," Healey added.

Like many cities, Petaluma has seen its budget hit hard by the recession. Brown said sales tax revenues, based largely on an auto mall, decrease every quarter. A property transfer tax is generating virtually nothing because home values have dropped significantly. Transit occupancy tax revenues are down 15% to 20%, and, because the city has no fund balances, it is receiving no interest, he said. Overall, the city faces a $1 million deficit for the current fiscal year and $3 million worth of red ink in 2009-10. The city is offering incentives in hopes of getting 15 of 340 employees to retire.

"In some respects it's a sign of the times," Moore said. "But recognizing that the city has severe budget problems, it seems short-sighted to do away with the experienced people you've got on staff and expect that you can provide the same level of service."

Brown said he hopes the planning situation is temporary and the Community Development Department returns in more stable form for the 2010-11 fiscal year.

John Brown, Petaluma city manager, (707) 778-4345.
Councilman Mike Healey, (707) 762-8768.
Mike Moore, Petaluma Community Development Department, (707) 778-4301.
Kathleen Miller, Petaluma Planning Commission, (707) 547-2000.