City finances better than expected

The city has more money to spend and bank than expected this fiscal year.

City Manager John Pietig reported on Tuesday good news and not-so-good news in the annual mid-year budget update to the City Council, but the bottom line was a $3-million windfall.

"Fortunately, during this past year, the (economic) recovery brought higher-than-expected revenue in property taxes, sales taxes, bed taxes and community-development fees," Pietig said.

The council wasted little time in spending the funds on one-time purchases and allocations, while saving some and barely deviating from Pietig's recommendations.

Former Parking, Traffic and Circulation Committee member Vic Opincar urged caution.

"Slow down," he said. "Defer as much as you can."

On the other hand, Charlotte Mazarik said, "We've got the money. Let's spend it."

Pietig warned that the city still faces financial challenges.

There had been a projected operating deficit for fiscal year 2011-12 of $934,000. But it was cut by almost 45% when labor agreements were negotiated with the police and firefighters' associations, and the Disaster and Recession Smoothing funds remain intact. City officials would like to keep it that way.

Expenditures in the 2012-13 budget are expected to remain flat, and modest revenue growth is predicted in the upcoming years. However, city officials presume that additional cost-saving measures or substantial increases in revenue will be necessary to cover any deficit.

The state budget will continue to impact the city, as will the investment returns to the state pension system for government employees.

In the meantime, the city had some spare cash.

Pietig's recommendations for mid-year modifications to the 2011-12 budget were:

•$600,000 to the insurance fund

•$1 million toward the restoration of the burn dump in Laguna Canyon

•$500,000 toward the Lifeguard Headquarters and public restroom project

•$724,500 for capital equipment purchases

•$20,000 to cover change orders or equipment related to the purchase of a new fire engine

•$10,000 to evaluate city-owned trees in Bluebird Canyon

•$50,000 to cover emergency repairs to sewers

•$157,529 and future delinquency funds transferred to the Open Space Fund

•$55,267 paid to the county per the County Loan Agreement

•$524,900 to buy a new fire engine

The recommendations left $172,000 from the windfall, which Pietig had earmarked for the general fund.

Mayor Pro Tem Verna Rollinger thought she had a better idea, and the council agreed. She successfully lobbied for a new information system that would make online city documents more accessible to the public from their homes.

Although the system works fine in City Hall, it is less effective from off-site, she said.

"I helped design the system, and I can't use it from home," Rollinger said.

Replacement for the current system is expected to cost $80,000.

The council also honored the request of Mayor Jane Egly and Councilman Kelly Boyd to set aside the annual $15,000 rent from the Laguna Playhouse. Councilwoman Elizabeth Pearson recused herself from the vote because she is a playhouse employee.

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