The city of San Diego is on track to end the fiscal year almost on budget.
By the end of June, the city is expected to be over its $1.2 billion general fund budget by only $100,000, according to the Financial Management Department's analysis of data from July through September.
Additional General Fund Variances Projected By Independent Budget Analyst
- $1.4 million in Communications Department salary savings largely due to the delay of a department restructuring.
- $1.3 million in transportation & storm water salary savings due to vacancies.
- $1 million increase in Fire-Rescue Department overtime related to strike team deployments, as well as $1.6 million due to increased staffing levels for fire academies.
- $1.9 million increase in termination pay, largely due to increases in the Police and Fire-Rescue departments.
- $1.6 million increase in pay in lieu of annual leave spread over various departments.
- $5.1 million and $3.2 million increases in fringe benefits for the Fire-Rescue and Police departments, respectively. These increases are partially offset by decreases in other departments for an overall general fund fringe benefit increase of $5.6 million, which is due to increased workers’ compensation and long-term disability costs, as well as the reallocation of fixed fringe benefit costs based on updated citywide staffing configurations.
The City Council will hear the department's first quarter budget monitoring report on Monday.
Seth Gates in the council’s Independent Budget Analyst’s Office, who helped review the report, said it shows the city's finances are "outstanding" for the first time in years.
"To be this close as of right now to adopted budget projections is a pretty good testament to what a quality job was done in projections and forecasting,” said Gates, a fiscal and policy analyst who's worked for the city since 2009.
Gates said although the forecast is based on a small timeframe, it's one of the best budget monitoring reports he's seen.
“We’ve had budgets where we were over-projected by tens of millions of dollars due to the economic collapse,” he said.
The analysis projects San Diego will end the fiscal year spending less than expected on salaries because the city has so many openings. As of October, the city has 219 more vacancies than anticipated.
Additionally, the monitoring report shows the city is likely to bring in more money from sales and hotel room taxes thanks to more visitors.
"Stable growth in consumer spending in all major industry groups and growth in overnight visitors are driving the increased projections for these revenues," the report said.
But gains like these are partially offset by lower than projected property tax revenues and high overtime costs, particularly in the Police Department, which has struggled for years to retain and recruit officers.
For example, the city will save $7 million in police salaries due to vacancies, but a projected $6.9 million increase in overtime will nearly cancel this out. (The budget analyst's review notes the additional overtime includes the estimated $3.2 million increase in holiday pay agreed upon by the city and the police officers union.)
The council's budget analyst also said state and federal reimbursements for money spent on disaster recovery will be greater than anticipated. However, this will be somewhat counterbalanced because the city won't receive a $1.5 million repayment from San Diego Convention Center expansion bonds after a court rejected the construction's funding method.
A midyear budget update is expected in February.
