Workshop in response to $147,000 expected shortfall.
Despite conservative budgeting, the global financial crisis is forcing Solana Beach to cut expenditures and consider new sources of revenue in order to make up for projected shortfalls in 2009, 2010 and beyond.
While furloughs or layoffs aren't in the offing, city employees won't get their anticipated pay raises.
The city's primary revenues, which include property and sales tax, are expected to fall more than $500,000 this current fiscal year and almost $900,000 in fiscal year 2009-2010.
"That's significant for our little community," said City Manager David Ott at a fiscal sustainability workshop Feb. 2.
Even with significant cuts already made this year, the city is looking at a $147,000 shortfall because of unexpected increases in fire and legal expenses, Ott said.
He recommended postponing several infrastructure projects or dipping into the city's reserves, which hold $4.7 million. This equals 30 percent of the city's operating budget, which is much higher than some other cities in the region. However, he warned against using the reserves for day-to-day operations.
To meet the challenge posed by next fiscal year's even darker forecast, the city's department heads explained how they would trim more than $570,000 in materials, supplies and services, while still trying to provide the high level of service expected by the community.
Everything from minimizing paper usage to cutting back on street sweeping was suggested. Major savings were identified in the broadcast and Webcast of city council meetings, for a savings of $46,000.
"All of this is difficult, but this one is almost unacceptable," said Council member Lesa Heebner. "Our government needs to be transparent."
No pay raises
More money will be saved by not filling an open planning department position, and employees will not receive their annual 3 percent pay raise. But so far, Ott said he plans to hold to current levels for the already lean staff."[Furloughs and layoffs] are the absolutely last things you will hear me recommend, but if I have to, I will," Ott said.
Contributions to community groups are also slated for reductions. The Solana Beach Library is recommended to receive $10,000 instead of $15,000; the Chamber of Commerce $6,500 of the $13,000 it requests each year for Fiesta del Sol; and $10,000 less for the San Dieguito River Park Joint Powers Authority.
"The pain is being spread all the way around," Ott said.
New fees ahead?
The council will have the final say on the 2009-2010 budget cuts when it adopts a formal budget in June.
However, despite all the proposed cuts, the city could go into the red by $200,000 in 2010 if no further action is taken. And, Ott said he does not expect the economy to fully recover.
"This is different from previous recessions," Ott said. "People's behaviors today are changing, will change for the long-term future."
Therefore, Ott presented several fee and tax increases to provide new sources of revenue for the city.
The majority of the council was against increasing the sales tax or taxing utilities at this time.