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This was a special workshop session covering two substantive items: the finalization of the city's two-year work plan and a deep-dive into the proposed FY 2026–27 operating and capital budgets. Councilmember DeCarli was absent; all others were present. No binding votes were taken — this was a workshop to receive staff presentations and council direction ahead of the formal budget adoption in June.

Item 1: Finalization of FY 2026–28 Work Plan and Direction to Staff

City Manager Flynn summarized the two-year work plan, which prioritizes major capital projects (the public safety building, water infrastructure, pavement restoration, the Lucchese Skate Park, and a downtown restroom), alongside policy initiatives including the Fairgrounds Master Plan, North Station Specific Plan, zoning code reform, climate action implementation, and development of new AI and e-mobility policies. The plan also highlights fiscal priorities such as bond issuance for infrastructure, labor negotiations, and evaluation of long-term service agreements for animal services and waste management.

No public comment was received specifically on this item. Council expressed general support. Mayor McDonnell noted the importance of maintaining focus on climate even as media attention has shifted. The council provided informal direction to staff to proceed — no formal resolution was required.

Item 2: Workshop on Proposed FY 2026–27 Operating and Capital Budgets and Revised Long-Term General Fund Forecast

#### Operating Budget Overview

Assistant Finance Director Corey Garo led the operating budget presentation. Key figures:

Total General Fund revenues: $85.1 million (up 2.6% from prior year)

Total General Fund expenditures: $85.4 million (up 3.3%)

Gap covered by: approximately $308,000 in beginning unassigned operating reserves, leaving an essentially zero ending balance

Emergency reserves: $10.8 million, equal to roughly 14% of operating expenditures — slightly below the city's 15% policy target

Citywide budget (all funds): approximately $400 million in expenditures, supported by $380 million in revenues, with the ~$20 million difference drawn from accumulated fund balances in capital and special revenue funds

The budget was balanced through $1.6 million in targeted reductions, primarily freezing seven vacant positions (four in the General Fund), reducing part-time staffing, cutting some service contracts, and a departmental reorganization. Public safety (police and fire combined) represents 67% of General Fund expenditures. Personnel costs overall are 79% of the General Fund budget, severely limiting the options for further cuts.

Long-term forecast: Staff projects a structural deficit of approximately $2 million heading into FY 2027–28. The causes are flat or declining tax revenues — particularly sales tax, which has dropped significantly since 2022 — and rising costs driven by CalPERS rate increases, health insurance premiums (projected at 7% annual growth), workers' compensation (8% annual growth), and inflation. Staff presented a phased reduction plan: initial cuts implemented at the start of FY28, with a mid-year reassessment in December 2027 to determine whether additional reductions are needed.

Departmental highlights (condensed):

Police: No reduction in core services. New investment in dispatch battery backup systems, a public records technology upgrade, and a mobile radar display. Savings include eliminating a $120,000/year equipment storage lease and reducing TOT-funded event staffing costs.

Fire: Freezing one vacant firefighter-EMT position; strategic reductions to part-time BLS ambulance staffing hours and fire inspection staffing. The Station 1 seismic retrofit is underway in a temporary facility.

Parks & Recreation: Full-time staffing maintained. Year-round aquatics program launching at two pools (partially offset by Measure M funds). Recommending reductions to some service contracts and special event city sponsorships, pivoting toward seeking outside sponsorships. Luma Ice paused for FY27 to redirect resources toward year-round fairgrounds programming.

Community Development: Building an in-house planning division; recruiting a Planning Manager. Merged with Economic Development; a two-year economic development work plan will come to council next month.

Public Works: Unfunding a Senior Traffic Engineer, two Street Maintenance Workers, and a Senior Transit Planner. Transit service modifications under review due to declining revenues.

Water Resources & Utilities: One new FTE for utility operations; $70 million wastewater bond coming to council June 8th for the PIPS Force Main project; solar array at Ellis Creek expected to save ~$250,000/year in its first full year of operation; possible pause on Adobe Phase 2 recycled water expansion to prioritize critical infrastructure.

#### Public Comment on Operating Budget

Several substantive comments were received:

Darren Kuson raised detailed questions about the city's multi-year Enterprise Resource Planning (ERP) software replacement, which he estimated has consumed roughly $6 million over several years across multiple funds. He noted apparent vendor changes (from Workday to SHR Point), expressed concern about scope creep and cost overruns, and urged the council to audit the technology stack and determine whether the project can be deferred or consolidated.

Mary Davies, a cyclist, asked the city to designate a staff lead and budget for inexpensive, high-impact cycling improvements — better signage, trail connections, and crossings — rather than waiting only for large capital projects.

Chantel Rogers asked for more public notice time before budget workshops (she noted the draft was released only one week before the meeting), questioned a $375,000 transit budget adjustment tied to a Sonoma Transit obligation, and raised the forgiveness of the LADS (Landscape Assessment Districts) debt.

Maureen Gacha expressed concern that reserves are below the 15% policy threshold with no clear plan to reach it, noted that all revenue assumptions are positive while several cost unknowns (labor negotiations, marina debt, animal services) remain unresolved, and asked why a $5 million land sale (the old police station) isn't being used to shore up reserves rather than fund the public safety facility.

Maureen Shaw asked about future staffing for the new fire station, noting that a new station will require additional personnel — expensive given public safety benefit costs.

#### Council Discussion on Operating Budget

Barnacle echoed concerns about ERP costs, asked about the LADS write-off (previously approved by council), confirmed new fire station staffing is factored into Measure H projections, and emphasized the need to grow the city's revenue base — noting that Petaluma significantly underperforms comparable cities in property tax per acre and general fund per capita. He called for a broader revenue conversation this summer.

Shribbs raised concerns about the marina (operating at a $150–200K/year deficit, with a $7M+ accumulated loan from the 1980s under active negotiation with the State Division of Boating and Waterways), maintenance staffing levels for parks and facilities, and the reserve calculation.

Quint asked whether the marina could be privatized or divested; staff confirmed ongoing negotiations with the state on the underlying loan.

Nau focused on Measure U road spending, questioning why certain residential streets in her district remain unrepaired, and floated the idea of a vacant property or empty buildings tax to generate revenue.

Cader Thompson provided context on Measure U, noting it was never solely a roads measure and that having no sunset clause (unlike Santa Rosa's expiring sales tax) actually protects Petaluma's fiscal stability.

Mayor McDonnell asked for clarification on the "structural deficit" terminology, noted that the ~$20 million gap between total citywide revenues and expenditures is not an emergency reserve draw but rather intentional use of accumulated project fund balances, and expressed support for the budget's overall direction while acknowledging the difficulty of further cuts.

#### Capital Improvement Program (CIP)

Deputy Director of Public Works Jonathan Song presented the $132 million proposed FY 2026–27 CIP — an unusually large figure driven primarily by two projects moving into construction:

PIPS Parallel Force Main (~$46M): A 2.5-mile wastewater pipeline from the Primary Influent Pump Station to Ellis Creek Water Recycling Facility. Permitting near completion; bid planned for summer 2026, construction award in fall 2026. A $70 million wastewater revenue bond (backed solely by wastewater enterprise funds) will come to council June 8th.

Petaluma Public Safety Facility (~$46M this year of a $71.6M total): New police station, fire headquarters, and emergency operations center at the Fairgrounds. Three design-build entities are currently bidding; bids due May 21st; contract award targeted for July 6th; completion spring 2028.

Paving program: ~$7.7 million, covering Rainier Avenue (in construction), Caulfield Lane and Howard Street (in design, construction next year), D Street (2028), and preventive maintenance. Measure U provides about 33% of paving funding.

Trestle: $375,000 (rolled over from prior year) for community visioning, ownership/title research, permitting pathway analysis, and regulatory coordination. No new construction funding. Staff (Gina Benedetti-Nik) explained that ownership must be resolved before grants or design can meaningfully advance.

Downtown Restroom: Budget reduced to $180,000 (from $800,000 over prior years, with funds redirected to other projects). Staff acknowledged this is likely insufficient for construction and will pursue either a deal with the private property owner of the Putnam Plaza restroom or a prefab unit, with a funding gap analysis to follow.

Other notable projects: Lynch Creek Trail improvements, Skate Park Phase 1 (groundbreaking imminent), Senior Center parking lot reconstruction, airport infrastructure (~88% grant-funded), electric bus charging infrastructure Phase 2, and multiple Ellis Creek facility upgrades.

#### Public Comment on Capital Budget

A substantial portion of public comment focused on the Trestle. Multiple speakers — including representatives from the Petaluma Downtown Association, the Petaluma Area Chamber of Commerce, and a newly formed "Trestle Promenade Now" steering committee — called for faster action, a community visioning process, aggressive grant pursuit, and resolution of the ownership question. A structural preservationist who walked the trestle the day of the meeting suggested that pile repairs may be feasible without full replacement, potentially reducing costs significantly. Safety concerns (liability from public trespass onto the deteriorating structure) were raised by multiple speakers.

Other public comments addressed: the need for a downtown restroom regardless of aesthetics; questions about the $70 million wastewater bond structure; concern about Measure U "mission creep" and the need for a formal written response to the Measure U Oversight Committee's 2025 letter recommending 25% of funds go to infrastructure.

#### Council Discussion on CIP

Council members across the board expressed support for the trestle work proceeding now, with general agreement that public visioning should begin promptly and ownership must be the first priority. Barnacle committed to helping fund a bond measure if no other path emerges. Shribbs noted new information about potentially less invasive pile repair techniques. McDonnell praised the overall pace of capital delivery, while noting that the city consistently budgets more than it spends and should improve delivery rates as fund balances continue to accumulate (~$180M citywide).

Additional topics: St. Francis Drive's poor condition (PCI of 15) and its importance as a school-adjacent road drew support from Nau, Barnacle, and Cader Thompson; staff estimated a $4 million cost. Restroom needs at Lucchese/Skate Park were acknowledged as a future Phase 2 item. The downtown bathroom negotiation with the Putnam Plaza property owner was requested to come back to council with a status update.

Key Takeaways

The FY 2026–27 General Fund budget is balanced but razor-thin — revenues and expenditures are both ~$85 million, with essentially no unassigned reserve remaining and emergency reserves slightly below the 15% policy floor. A $2 million structural deficit looms for FY 2027–28, requiring further cuts that will likely involve staffing.

Two $70+ million construction projects launch simultaneously in FY27 — the PIPS wastewater force main (backed by a $70M revenue bond coming June 8th) and the new Public Safety Facility (bids due May 21st, contract award July 6th) will dominate the $132M capital budget.

The Trestle moved from "study" to community priority — council expressed unanimous support for beginning community visioning immediately, with ownership resolution as the threshold step; a new community steering committee has formed and offered to partner with the city.

Revenue growth is the city's core long-term problem — sales tax has declined significantly since 2022, property transfer tax is down, and expenditure growth continues to outpace revenues; council signaled a formal revenue/economic development conversation is planned for this summer.

Measure U road spending drew scrutiny — multiple residents and council members questioned the pace of residential street repairs relative to Measure U's original promise; staff noted that 25–30 miles paved in six years reflects real funding and staffing constraints, and that a formal written response to the Oversight Committee's 2025 recommendations has not been issued.

AI-generated summary from voice-to-text transcript. Not the official record. Verify important details with the source documents found at the link below.

You can now subscribe to receive emails when agendas and meeting summaries are posted by following the link below.

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This was a lengthy regular meeting featuring proclamations, presentations, a budget delivery, and several substantive agenda items. The session began with a closed session on labor negotiations and anticipated litigation (Vice Mayor DeCarli recused from the litigation item); the city attorney reported the Council authorized initiation of legal action if warranted.

Proclamations and Presentations

The Council issued three proclamations: Asian American Native Hawaiian and Pacific Islander (AANHPI) Heritage Month, Bike Month (May 2026), and National Peace Officers Memorial Day / Police Week. Representatives from the Historic Chinatown Park Committee accepted the AANHPI proclamation and offered remarks connecting historic exclusion of Chinese residents to present-day immigration fears, urging the city to go beyond symbolic recognition. Sonoma County Bicycle Coalition Executive Director Eris Weaver highlighted upcoming Bike Month events, including three Bike to Work Day energizer stations in Petaluma on May 14th. Police Chief Brian Miller accepted the police proclamation and recognized department award recipients.

Detective Alyssa Hanson was honored as the Sonoma County Exchange Club Peace Officer of the Year (the 78th such award), recognized for outstanding investigations including a major case involving juvenile victims that resulted in charges carrying a potential 50-year sentence. Certificates were also presented by representatives of Assemblymember Damon Connolly and Senator McGuire.

The FY 2026-27 Proposed Budget was formally delivered by Assistant Finance Director Cory Garbarino. The budget is available on the city website; a budget workshop is scheduled for May 11th, with first reading on May 18th and second/final reading on June 15th.

City Clerk Kaitlyn Corley and Assistant City Attorney Dylan Brady presented an overview of California Senate Bill 707, which updates the Brown Act to require eligible jurisdictions (population over 30,000) to offer both call-in and two-way remote (Zoom) public participation. Petaluma's first meeting with remote public comments will be July 6, 2026. The law also expands language access requirements (though Petaluma already provides translation via Wordly) and loosens teleconferencing rules for council members participating remotely.

General Public Comment

Ten speakers addressed the Council on non-agenda items:

Three speakers (including a letter read on behalf of Coach Ricky Chris, and appearances by Harlan Osborne and Frank Wright) urged the Council to name the East Washington community ball fields after longtime Argus-Courier sports editor John "JJ" Jackson, who passed away in 2023. City Manager Peggy Flynn subsequently announced staff would initiate the naming process through the Parks and Recreation Department.

Five speakers from the AANHPI community and the Petaluma Historic Chinatown Park Committee expressed gratitude for the proclamation and the 2025 renaming of Center Park, while urging continued action — including partnering with the AAPI Coalition North Bay to highlight local AAPI businesses and community members facing fear and uncertainty in the current national climate. A third-grade teacher and a member of the Sonoma County JACL also spoke.

Chantel Rogers raised concerns about a transit funding dispute between Petaluma and the Sonoma County Transportation and Climate Action (SCTCA) body, noting that Petaluma's attempt to withhold a ~$260,000 contributory payment for bus service caused other agencies (including Santa Rosa) to face budget shortfalls and delays. Council Member Cader Thompson responded that Petaluma intends to pay this year but wants a more equitable cost-sharing arrangement going forward, since other cities are not contributing.

Darren Kuzen (Planning Commissioner) raised concerns about Microsoft Teams chat communications during public hearings, asking whether backstage staff-to-member chats could affect meeting outcomes and whether a policy is needed.

Consent Calendar (Items 1–4, 6–8, excluding Item 5)

Passed unanimously (6-0; Barnacle/Cader Thompson motion/second). Items included:

Approval of April 20 meeting minutes

Acceptance of completion of the FY25/26 Pavement Preventative Maintenance Project (Dryco Construction, ~$890K) and release of retention

Acceptance of completion of the Hangar Door Replacement Project at Petaluma Municipal Airport (DMR Builders) and release of retention

Second reading and adoption of Ordinance No. 2928 N.C.S. adding outdoor RV storage as a permitted accessory use in the Rancho Arroyo Business Park PCD zone

Second reading and adoption of an ordinance authorizing a PG&E utility easement for the Fire Station #1 project

Adoption of the Remote Access Technology Disruption Policy (required by SB 707 by July 1, 2026): if Zoom goes down during a meeting, IT staff have one hour to restore service; if unsuccessful, Council votes whether to continue; uniquely, Petaluma's policy also requires an email blast and website notice to the public during any outage

Vote: Unanimous (7-0)

Item 5: Landscape Assessment Districts (LADs) — Annual Levy and Engineer's Report

Council Member Shribbs pulled this item for public discussion. Senior Management Analyst Delena Bradford explained that after nearly 2,000 staff hours, the city found that LAD fees — unchanged for up to 30 years in most districts — are far below the cost of maintenance. A 50%+1 homeowner vote is required to raise fees under Prop. 218, and outreach to the 10 most financially distressed districts largely failed to achieve that threshold.

The solution: a one-time General Fund contribution of approximately $750,000 to pay off accumulated deficits across all districts, resetting them to a financial baseline. Going forward, districts will receive only the services their current assessments can fund (meaning reduced service levels in some areas). The city will launch an online petition system for any district that wants to pursue a Prop. 218 fee increase — districts that get 25% of households to sign on will receive city assistance through the process. Staff plans a fuller LAD update to Council on July 6th.

Shribbs urged public communication to residents about the reduced maintenance levels and the relatively small cost (~$100/household/year in some cases) to restore them.

Vote: Unanimous (7-0); moved by Shribbs, seconded by Nau

Item 9: 2025 Housing Element Annual Progress Report

Planning Manager Andrew Tripple and Community Development Director Brian O presented the annual report. Key figures:

652 building permits issued to date = 34.1% of the 6th-cycle RHNA requirement of 1,910 units; the city is 37% through the 8-cycle period, so tracking slightly behind but close

Strong progress on extremely low/very low and low income categories; lagging on moderate and above-moderate (market rate) units

2025 highlights: 333 units entitled; 230 building permits issued; 99 certificates of occupancy; 31 ADU permits issued (average 27/year, far exceeding the 16/year RHNA goal)

Notable approved projects: Sig Commons (180 units mixed income), Gallagher Senior Living (85 units), Cherry Street (9 lots), Creekwood Condominiums (59 units)

Housing Action Plan: approximately 76% complete; remaining gap largely tied to the pending Zoning Code Update

Discussion was substantive. Mayor McDonnell noted that only about 35–40% of the 98 certificates of occupancy issued this year were market-rate units, and the year-over-year trend in completions is declining despite strong policy work, highlighting market forces (high interest rates, construction costs) as the primary obstacle. Council Member Barnacle pointed to San Jose's success — zero market-rate multifamily starts in 2024, over 1,000 in 2025 — achieved largely through development impact fee reductions and relaxed inclusionary zoning requirements, and urged Petaluma to seriously examine both. Staff noted they are in dialogue with stalled project developers (Oyster Cove, Haystack, Creekwood) and are exploring incentive structures as part of the upcoming Zoning Code Reform.

Vote: Unanimous (7-0); moved by Nau, seconded by Quint

Item 10: Petaluma Fairgrounds Plan — Contract with David Baker Architects

Senior Planner Ellis Stevie and Director Oh presented a recommendation to award a contract to David Baker Architects (DBA) to prepare the Petaluma Fairgrounds Plan, funded entirely by a $1.19 million CDBG-Mitigation grant awarded in January 2025. The plan will include: (1) a comprehensive master plan for the fairgrounds campus; (2) a conceptual plan for a Community Resilience Center (~10,000 sq. ft.); and (3) an infrastructure layout. DBA's team includes CMG Landscape Architecture, Sherwood Design Engineers, Plan to Place, Civic Makers, Fare & Pierce, and Bay Area Economics. The contract value is up to ~$885,000 with an additional ~$300,000 to reimburse city staff time. The planning process targets completion by late 2027.

DBA Principal Chelsea Johnson emphasized their approach of "designing for resilience and cultural continuity," economic feasibility modeling to ground public engagement in trade-offs, and a commitment to inclusive outreach through three public workshops.

Public comment included a lengthy statement from Planning Commissioner Darren Kuzen raising concerns about a perceived predetermined outcome (particularly regarding housing) and urging transparency. Council members were united and explicit: no housing on the fairgrounds. Multiple members cited the Healthy Democracy guiding principles (which do not mention housing), noted that housing is not a permitted use under the fairgrounds overlay, and emphasized that any sale of city property would require Council action. Council Member Barnacle noted the housing element process deliberately excluded the fairgrounds as a housing site.

Council Member Shribbs raised concerns about the adequacy of 10,000 sq. ft. for a resilience center; Director Oh explained this was driven by the $10M construction cap in a related grant, but that the figure is not fixed. Council Members Quint and Cader Thompson both called for incorporating a senior center into the fairgrounds vision. Council Member Nau highlighted the work already underway at the fairgrounds by Rebuilding Together (mobile showers, job-training classrooms, clothing for unhoused residents). Mayor McDonnell raised the need to resolve the fate of the speedway/raceway early, calling it the single biggest design constraint on the site.

Vote: Unanimous (7-0); moved by Barnacle, seconded by Cader Thompson (Barnacle voted "aye, but no housing")

Item 11: On-Call Professional Planning Services — Three Firms

Director Oh presented a proposal to award as-needed, on-call planning contracts to Metropolitan Planning Group (M Group), 4Leaf, Inc., and Urban Planning Partners — a shift from the city's 17-year arrangement in which M Group served as the sole full-service planning department contractor (~$2.65–2.8M/year). Under the new model:

Two in-house positions will be hired (Planning Manager and Associate Planner) to form a "core" in-house planning division managed day-to-day by city staff

M Group retains a $300,000 one-time contract to complete existing special projects (General Plan, Zoning Code), plus $30,000/year for specialty subject matter expertise; cost-recovery development review work (~$1M/year) flows to all three firms on an as-needed basis

Overall budget: ~$2.26M/year — approximately a 15% reduction from prior levels

Public comment was heated: speaker Heather Kratt urged the Council to reject the resolution entirely, arguing it continues M Group's dominance, misrepresented M Group as having banned food trucks from the city, and called on newly elected members who campaigned on bringing planning in-house to honor that commitment. M Group Vice President Heather Hines thanked the city and pledged a warm handoff. Former M Group staffer and current Petaluma citizen Melissa Abercrombie expressed pride in her team's work and asked how many jobs the four new positions would replace. Speaker John Hania directly challenged Council Members Barnacle and Quint to follow through on their campaign promises.

Vice Mayor DeCarli and Council Member Nau expressed concern that the contract term (up to 5 years with extensions) was too long; DeCarli would have preferred a one-year contract. Council Member Cader Thompson defended the five-year term as providing flexibility and noted that every city uses contract planners. Council Member Barnacle pushed back firmly on characterizations of M Group as a bad actor, arguing that decision-making authority rests with Council, and defended the hybrid model as fiscally and technically sound.

Vote: 6-1 (DeCarli dissenting); moved by Cader Thompson, seconded by Barnacle

Key Takeaways

Fairgrounds planning begins: David Baker Architects was awarded a grant-funded contract to produce a master plan and Community Resilience Center concept for the fairgrounds; the full Council stated clearly that housing is not part of the vision.

LADs reset with $750K General Fund backstop: Decades-old landscape assessment district deficits will be cleared with a one-time general fund payment; some neighborhoods will see reduced landscaping maintenance unless residents vote to increase fees.

Housing production declining despite strong policy: Only 99 certificates of occupancy were issued in 2025 — well below prior years — with market forces (rates, construction costs) outpacing the city's regulatory streamlining efforts; Council members raised serious interest in impact fee reductions and inclusionary zoning reform to unlock stalled projects.

Planning department begins transition in-house: M Group's role is significantly reduced; two new city planner positions will be recruited, with three on-call consultant firms retained for overflow and special projects — though the pace of the transition drew dissent from Vice Mayor DeCarli.

Remote public comment returns July 6: SB 707 requires Petaluma to restore Zoom participation for Council meetings; a new technology disruption policy was adopted to manage outages; expansion to advisory bodies was discussed but not decided.

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