The La Cañada Flintridge City Council began examining finances for the upcoming fiscal year this week and learned prudence will be called for as they consider how to fund $1.2 million in community-group requests, city programs and capital projects with a $745,550 surplus.
The city Finance Department estimates total General Fund revenue for the upcoming fiscal year will be $13,642,275 — which includes more than $4.6 million in anticipated property taxes, $2.7 million in sales tax and $1.8 million in building permits and plan check fees.
Expenditures for fiscal year 2017-18 are estimated to be $13,118,100, with public works ($4 million) and safety costs ($3.8 million) accounting for the lion's share of city spending, City Manager Mark Alexander told council members Tuesday in the first of at least three budget hearings scheduled this week and next.
A $2.5-million base contract with the Los Angeles County Sheriff's Department reflects a 3.782% increase passed on by the county agency for the upcoming fiscal year. Costs also include $185,000 for directed patrols and $172,650 for a school resource officer and community liaison.
"We've made a concerted effort over the years to try to keep our expenditures below our revenues," Alexander said. "This is what's allowed us to return money to reserves."
Though the city's reserve fund remains solid at nearly $12.5 million, Alexander acknowledged it's fallen short of the council's historic recommendation of maintaining it at 100% to 150% of the city's annual operating budget.
The city manager gave an overview of each department's financing and explained the impact of the recent purchase of the $11.23-million former Sport Chalet corporate headquarters, which will become La Cañada's new City Hall in 2018, on the reserve fund.
An initial $5.5 million was removed for a down payment, while an additional $1.2 million will be subtracted to accommodate the city's transition to the new building.
"We have the renovation costs for the new City Hall, and most of that will incur in the next fiscal year," Alexander said.
City officials are engaged in negotiations with Glendale's Knight Insurance Services for sale of the current City Hall building, which was priced at $3.3 million. But since talks are still ongoing, that amount was not included anywhere in the preliminary budget, the city manager explained.
While property owners of the 45,000-square-foot retail space formerly occupied by Sport Chalet's flagship store continue negotiations with a still-unnamed retailer, and could announce the newcomer as soon as this July, Alexander indicated Tuesday that the company would not likely generate sales tax revenue in 2017-18.
"Based on tenant improvements and build-out, they're not thinking they're going to be opening during the course of the next fiscal year," he said.
Budget meetings will continue Thursday and Monday at 8:30 a.m., at La Cañada Flintridge City Hall, 1327 Foothill Blvd., with a fourth meeting scheduled for Wednesday at 8:30 a.m, if needed. On Monday, community-group representatives will request a combined $359,375 of city funds to maintain programs, projects and personnel at their respective organizations.