San Diego Financial Outlook Reveals Surplus In Store If No Additional Spending
Thursday, November 14, 2013
SAN DIEGO — The city of San Diego will be able to maintain current service levels over the next five years, but mayoral candidates and the City Council will need to temper their demands for new spending, Interim Mayor Todd Gloria said Wednesday.
The city's new five-year financial outlook starts off with a $19.1 million shortfall in the next fiscal year, but Gloria and Financial Management Director Jeff Sturak called the figure "manageable.''
Without additional spending, surpluses are projected over the following four years.
However, the City Council has approved various initiatives that will add costs, including arts funding, construction of new fire stations and boosting the ranks of police officers.
"When the council and the public are faced with things like supporting the arts or building much-needed fire stations, the answer is yes, these things are obvious,'' Gloria said at a news conference. "When piled together and seen with their full financial impacts, it can be a bit surprising.''
Combined with state and federal mandates, the council actions swell the deficit to $62.1 million for the next fiscal year, and no surpluses are projected through Fiscal Year 2019.
The list does not include other things on the wish lists of either council members or city department heads, such as additional personnel or technological improvements.
"We don't have funds to cover all the needs and desires,'' Gloria said.
The mayoral candidates can use the financial outlook "to see what the future looks like and hopefully adjust their representations to match that,'' he said.
Gloria said the projections are still better than several years ago.
Sturak pointed out that in 2009, city officials had to make $90 million in cuts just to balance their baseline budget.
The projected shortfall for next year was around $7 million just last week, but the San Diego City Employees Retirement System board adjusted its investment strategy on Friday. While the move will reduce the pension system's investment risk, it is estimated the city will have to increase its annual pension contribution by $12 million, pushing the deficit up to the $19.1 million figure.
For the next fiscal year, the city's general fund is expected to receive $1.216 billion in revenue, and spend $1.235 billion. But those numbers will be balanced before the actual budget is adopted next June.