Balanced budget focuses on the future
June 05, 2012
With a balanced budget and positive financial forecast, the City of Carlsbad is moving ahead on community projects and other investments that contribute to an excellent quality of life for the community, according to city Finance Director Chuck McBride. McBride joined a team of city staff in presenting a $199.4 million preliminary operating budget to the Carlsbad City Council Tuesday. Watch a video about the city budget.
The spending plan
for the fiscal year starting July 1 focuses on several initiatives identified by the City Council at its annual goal setting workshop in January. At the top of the list is fostering a strong local economy and bringing new jobs to the city.
“We are seeing new investment in the city, including new corporate headquarters and major hotel, retail and commercial projects, which will strengthen the local economy” said Kathy Dodson, the city’s economic development manager. “We will continue to work in partnership with the business community in the coming year to help local companies thrive in Carlsbad and attract new entrepreneurial talent to our city.”
The city is also working on adapting its plans to better meet the community’s future parks and recreation needs. Improving traffic flow
, expanding the trails system and updating the city’s land use plans
to achieve the community’s vision for the future are also top priorities. Next fiscal year’s budget also includes projects to improve efficiency and community connection through technology, including installing free public Wi-Fi at city parks and community centers.
“City staff at all levels have worked very hard to find efficiencies throughout city operations so we can maintain a very high level of service to the community while keeping our spending in line with revenues,” said McBride.
When the city saves money in operations, those resources can be redirected to projects and services that benefit the community, added McBride.
The preliminary operating budget for FY 2012-13 totals $199.4 million, which represents an increase of $5.6 million, or 2.9 percent, compared to the FY 2011-12 adopted budget. Operating revenues are estimated at $205.8 million, which is about a $5.8 million, or 2.9 percent, increase over the current year’s projections.
The largest part of the operating budget is the general fund, which pays for most day-to-day city services, such as libraries, parks, streets, and police and fire services. The recommended general fund operating budget is $115.1 million, with estimated revenues of $116.1 million. This is a 1.3 percent increase in the estimated general fund revenues compared to the projected FY 2011-12 revenues, and a 3 percent increase in general fund budgeted expenditures compared to the FY 2011-12 adopted budget.
The city’s three largest sources of revenue in the general fund are property tax, sales tax and hotel room tax.
- The largest source of revenue, property tax, tends to lag behind economic growth and remain relatively stable over time. In FY 2012-13, property taxes are expected to decrease slightly, providing approximately $47.8 million to the general fund, compared to $48.1 million in FY 2011-12.
- Changes in sales tax revenue align more closely with changes in the overall condition of the economy and are expected to increase as the current economic recovery gains steam. Sales taxes are expected to total $28.8 million for FY 2012-13, an increase of 4.4 percent compared to the FY 2011-12 projections.
- The third highest general fund revenue source is Transient Occupancy Taxes (TOT, or hotel taxes), estimated at $13.5 million for FY 2012-13, an increase of 8 percent compared to FY 2011-12 estimates. Growth in the TOT base (existing hotels) is expected to increase by 3.5 percent in FY 2012-13, driven primarily by forecast increases in the average daily rate paid for rooms. The Hilton Oceanfront Resort & Spa, a new hotel, is also expected to open in the summer of 2012 and add additional TOT revenues. TOT revenues peaked in FY 2007-08 at $14.3 million and, during the economic downturn, fell to a low of $11.5 million in FY 2009-10.
Although the economy is looking up, McBride warned that the recovery remains fragile. State budget problems, the elimination of redevelopment agencies, pension obligations, and increasing costs for utilities and materials are all areas of continuing concern.
Next year’s budget eliminates the equivalent of 16 full time positions, bringing the total city workforce reduction since the beginning of the recession to 43 positions. Even with a smaller staff and other reductions in resources, the city has not made significant cuts to public services. City libraries and community centers remain open seven days a week and city offices are still open Monday through Friday. Next week the city will break ground on a new park and swimming pool complex.
“We are coming out of the recession on solid financial footing and ready to start moving forward on projects important to our community,” said McBride. “We will continue to be careful with our money because that’s the best way to ensure we deliver on our community’s vision for the future.”
The city’s proposed $30.5 million Capital Improvement Program budget
, which includes major construction projects, was presented May 22. Both spending plans will be considered for final adoption by the City Council June 26.
The public is invited to a workshop
on the city budget Thursday, June 7, at 6 p.m. at 1635 Faraday Ave. At the workshop, attendees will hear an overview of the city’s budget and have an opportunity to ask questions and make comments. Input gathered at the workshop will be provided to the City Council prior to adoption of the final budget.
City media contact
Kristina Ray, 760-434-2957, email@example.com