Where Did San Diego Find The Extra Money For Its Next Budget?
Wednesday, April 16, 2014
The city went from a predicted $19 million shortfall to a balanced budget with extra money to spend.
There seemed to be a lot of money to go around when San Diego Mayor Kevin Faulconer presented his budget proposal on Monday.
That's a different tune than was sung in November when the city released its financial projections for fiscal 2015, which begins July 1. The five-year outlook said the city could face a $19 million shortfall.
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But Faulconer presented a balanced budget this week that actually adds services instead of making cuts. Mary Lewis, the city's chief financial officer, said the city's revenues increased by $41 million from what was predicted for fiscal 2014 to what is budgeted for fiscal 2015.
To predict how much money it will have, the city uses formulas to calculate how much property, sales and hotel taxes it will collect. Lewis said the city didn't change these formulas.
So where did the extra money come from?
Lewis said the city took in slightly more than it expected from property, sales and hotel taxes and franchise fees, but it also received $11 million extra in property taxes that were redistributed from dissolved redevelopment agencies. City departments also brought in more revenue than expected from such items as parking ticket fines.
The $11 million from redevelopment agencies wasn't something the city was comfortable last November including in its five-year outlook because it wasn't certain at that time, Lewis said.
"The five-year outlook is a higher level look at where the city is. But when you do the budget, you have hundreds if not thousands of adjustments that go in from all the departments, all of their expenses and revenues, and we look at all those funds," Lewis said.
She said the city also spent less money than it thought it would on things such as pension payments, contracts and the IT department.
While the city assumed it would save $12 million from the pensionable pay freeze negotiated with city employees, it also pocketed an extra $5 million in investment gains that it wasn't expecting.
The city also prepaid some of its expenses in its midyear budget adjustment, which saved money, Lewis said. The city prepaid its contributions for workers' compensation, long-term disability and public liability reserves.
The higher than expected revenues and lower than expected expenses combined to give the city an extra $35 million to spend in the fiscal 2015 budget. Faulconer wants to put that money toward fixing roads, hiring more police officers and building a temporary fire station in Skyline.
His budget proposal will go to the City Council next week.
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