Costa Mesa’s revised budget no longer assumes a deficit, according to a presentation given to the City Council on Tuesday.
The proposed 2013-14 fiscal year budget, at $131.8 million, has been whittled down in the weeks since it was first presented in mid-May. At that time, it totaled $157.4 million but with a $12.7-million deficit.
Included in the budget is about $18.3 million, or 13.9% of the budget total, toward capital improvements — a stated priority of the council majority. If approved, the amount would be about $2.3 million, or 11%, less than what was adopted last fiscal year.
The proposed budget as a whole would also be about a half percent less than last year’s $132.6-million adopted budget.
Next year’s budget also anticipates increases in Costa Mesa’s top three revenue generators, which make up about 70% of the overall budget: sales tax, primarily from South Coast Plaza and the Harbor Boulevard car dealerships; property tax; and the transient occupancy tax, acquired from overnight hotel and motel stays.
The largest projected increase of the three is from sales tax: $48.5 million for the next fiscal year, up $3.5 million from the year before.
City CEO Tom Hatch warned against relying on the sales tax revenue.
“It’s a volatile revenue source that caused havoc in the community when the economy plummeted and we had to scramble to change the way we funded the reoccurring costs,” he said.
Hatch added that another recession is possible, “and those revenues could plummet.”
City staff also presented answers to eight questions posed during a May 28 council study session, among them how many vacant positions are included in next year’s budget.
Staff wrote that of the 467 full-time budgeted positions, 43 are considered vacant, based on current staffing levels. On Tuesday, they added that of those 43, 12 positions are in the Fire Department and are set to be eliminated entirely.
City officials also noted that the Police Department has been in the process of hiring 10 full-time officers and 10 reserve officers since April.
In a short speech to the council Tuesday, Police Chief Tom Gazsi called the job market “very competitive” for officer positions. He said many people apply, few go through the testing process and fewer still are chosen.
The council is scheduled to vote on whether to adopt the 2013-14 fiscal year budget during its June 18 regular meeting.