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San Diego Predicts $7.6 Million Surplus In Fiscal 2016

Photo caption:

Photo by Nicholas McVicker

San Diego Mayor Kevin Faulconer presents his revised 2016 budget at the Kearny Mesa Recreation Center, May 15, 2015.

The city of San Diego expects to complete the current fiscal year with a $7.6 million surplus in its general fund, according to a report released Friday by the mayor's office.

The difference is roughly split between slightly higher revenues than projected in the budget, and expenses that are a little lower, according to the report. The general fund pays for basic services like public safety and libraries.

Mayor Kevin Faulconer proposed to use $5.8 million of the surplus to add to the city's Public Liability Fund, which pays out legal awards. He suggested the city should hold onto the remaining $1.8 million in case of unexpected expenses.

"The city will likely face increased costs due to El Niño storm conditions and a higher-than-expected pension payment next year, so Mayor Faulconer has proposed putting most of the modest surplus projected for the current year's budget into reserves," mayoral spokesman Craig Gustafson said.

"This is the fiscally responsible approach to ensure we are in the best possible position to present a balanced budget proposal this spring that maintains the improvements we've made to neighborhood services in recent years," he said.

The report was based on six months of actual financial data, along with projections of anticipated spending and revenue trends for the remainder of the fiscal year, which ends June 30.

According to the report, the budget for the current fiscal year reflected a moderately improving economy. However, economic performance has slowed, with revenue from property taxes coming in 1.1 percent less than expected, and sales taxes 0.5 percent lower — primarily due to lower gas prices.

That was offset by higher than expected hotel room tax revenue, projected to be 3.8 percent above budget.

The lower gas prices have also been good news, as fuel costs for the city's fleet of vehicles could end up being $2.8 million less than planned.

Water conservation by the Parks and Recreation Department is expected to save $3.5 million, according to the report, which will be presented to the City Council at a future meeting.

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