$163.2-million budget awaits Costa Mesa council’s OK

Costa Mesa City Council members are expected to finalize a $163.2-million budget Tuesday.

The latest iteration is roughly $8.2 million more than the preliminary version council members reviewed in May.

Overall, it’s about $18.6 million larger than the budget for the fiscal year ending June 30.

As proposed, the 2017-18 spending plan is balanced and “provides the highest level of service to the community within existing financial resources,” according to a staff report.

Among the notable changes incorporated since the council last reviewed the budget is $125,000 in funding for a state employee to serve as a group home inspector.

That person would focus specifically on Costa Mesa group home issues and be assigned to City Hall.

The revised budget also includes $100,000 for improvements at the Costa Mesa Tennis Center, which has been raised regularly as a need throughout the budget process.

Specific priorities will be determined after the budget is passed.

City staff suggests funding these additions by reducing a planned operating transfer from the general fund, which makes up most of the city’s budget and is used for operating and discretionary purposes.

The proposed budget also includes an almost $3.2-million transfer from existing general fund reserves to the city’s self-insurance fund, which accounts for workers’ compensation, general liability and unemployment insurance.

Doing so would bring the balance of that fund to net zero, according to a staff report.

General fund revenue forecasts for the 2017-18 fiscal year have gone up by $564,087 since the council last reviewed the budget — largely due to a projected increase in transient occupancy tax charged for motel and hotel stays.

On the flip side, an updated projection from May showed the city could receive $1.03 million less in sales tax revenue over the next fiscal year than originally budgeted.

“Since general economic news continues to be positive, staff will leave the existing budget amount unchanged and continue to monitor these revenues,” the staff report states.

This year’s budget anticipates the city will tap into some new revenue streams — including the voter-approved Measure X, which allows some medical marijuana businesses to open in the area north of South Coast Drive, west of Harbor Boulevard, south of MacArthur Boulevard and east of the Santa Ana River, though not in South Coast Collection.

Those businesses will have to pay about $49,000 in fees to obtain the business and conditional use permits necessary to open.

Additional fee money is also projected to flow into city coffers as a result of a recent council decision to have the Costa Mesa Fire & Rescue Department assume responsibility for providing all local ambulance transportation services.

The budget also proposes increases to various fire and parks fees — such as for operational fire permits, park rentals, Senior Center travel trips, youth camps and programs — that city officials have said are well below the amount needed to offset costs.

During the council’s budget study session in May, Mayor Katrina Foley raised concerns with increasing fees for programs that cater to families and senior citizens.

“I don’t think we should be balancing our budget on the back of seniors and working families,” she said at the time.

Tuesday’s council meeting starts at 6 p.m. in City Hall, 77 Fair Drive.

luke.money@latimes.com

Twitter @LukeMMoney