Escondido CA. posts $4.1M surplus after years of deficits

Escondido posts $4.1M surplus after years of deficits

Sales-tax revenue returns to pre-recession levels, expected to continue upward trend

2012-11-01T16:15:00Z2012-11-01T16:08:41Z
David GarrickNorth County Times
1 hour ago

After four years of deficit spending, employee layoffs and budget cuts to cherished programs, Escondido’s finances have bounced back in a big way.

Escondido posted a $4.1 million budget surplus during the fiscal year that ended June 30, city officials said. That follows a $514,000 deficit the previous fiscal year, and much larger deficits of $6.9 million and $4.7 million the two prior years.

Mayor Sam Abed said this week that the extra money will allow the reopening of City Hall on Fridays beginning in January, and that the city might also hire more police officers and firefighters.

Abed also said he expects Escondido’s revenues, especially sales tax, to continue their upward trend because of new projects. Those include the $55 million remodel of Westfield North County mall — which includes a new three-story Target — and the city’s first Walmart scheduled to open in late 2013.

Sales tax revenue, which Escondido relies on more than other cities because of its auto park and regional mall, returned to pre- recession levels this year.

Finance chief Gil Rojas said sales tax was up 10.4 percent during fiscal 2012 to $27.8 million, which accounted for 35 percent of the city’s $79 million in overall revenue.

Despite such gains, Abed warned that the city must be cautious about increasing expenses, partly because much of the $4.1 million surplus was not from typical revenue increases. He estimated the actual surplus was closer to $400,000.

Nearly $1.6 million was a one-time payment from the county related to the demise of redevelopment agencies in California last year.

And roughly an additional $2 million were transfers from the city’s recycling fund and an account set aside for upgrades at the Daley Ranch recreation area. Council members decided last year to begin including that money in the city’s general operating budget.

Most of the surplus was transferred into the city’s reserves, increasing that fund to $22.7 million.

But Abed said some money will be spent to reopen City Hall on Fridays, which required negotiating with labor unions representing city workers.

“We aren’t going to be a part-time government any more,” Abed said. “Our efforts to improve the city have been compromised by being closed on Fridays.”

The city began closing every other Friday in May 1993, and has been closed every Friday since early 2009.

Abed said other possible new expenditures would be filling some of the city’s 20 vacant police officer positions, and hiring enough firefighters to fully staff all of the city’s seven stations.

In addition, the city will spend more than $150,000 opening a computer lab in the former site of the East Valley library branch in January.

While most revenue sources increased during 2012, city fine revenue dropped $254,000, or 13 percent, because fewer red-light camera tickets were issued.

And a plan to sharply reduce the recreation division’s subsidy with a combination of program cuts and higher fees has not worked as well as expected, Rojas said.

Recreation revenue was $186,000 less than expected, and expenses were slightly higher than predicted. So the division ran a $454,000 deficit last year, compared to the city’s goal of a $253,000 deficit.

In addition, Reidy Creek municipal golf course ran a $53,000 deficit, primarily because the number of rounds played there has steadily dropped from 32,900 three years ago to 29,100 last year.

Councilwoman Marie Waldron said the city should consider lifting its ban against drinking alcohol on the course to encourage more groups to hold tournaments there.

“I think you’d get more people playing there without the ban,” she said.

Escondido posts $4.1M surplus after years of deficits : Escondido