Costa Mesa is expected to end this fiscal year in the black, city Finance Director Bobby Young said.
The fiscal year will conclude June 30, possibly with a $200,000 surplus, Young said this week.
After a string of deficits, this could be the second consecutive year that the city has had a budget surplus.
The first-year finance director said the city's revenue climbed — as his department projected — with a 5.2% boost in sales-tax revenue and a 6.8% increase in transient occupancy tax, which is applied to hotel stays.
Costs are up too, but have been covered by new revenues and cost reductions the City Council made last year.
The city's firefighters, meanwhile, stopped paying 5% toward their pensions in November.
The contributions were part of a contract amendment agreed to in 2010 that netted the city $500,000 annually. Since those contributions ended last November, Costa Mesa and its firefighters have failed to reach an agreement to restart the payments.
Mayor Pro Tem Jim Righeimer called it a mistake if the city's bookkeepers were counting on city firefighters to pay into their pensions — a $272,000 expense — beyond the November deadline.
With about four months left in the fiscal year, the city has about half of its contingency fund left. The bulk of the expenses have gone toward restructuring the city, from contracting with Huntington Beach for police helicopter services to hiring consultants.
The city could spend up to $123,500 more in June if the council approves putting a city charter initiative on the primary ballot. The same initiative would cost between $78,500 and $97,500 if it were in November's general election.
Young sounded hopeful about the city's fiscal health, pointing out Costa Mesa's general fund balance is just under $46 million — a $4-million increase from a couple of years ago.
However, it's still nowhere near its high point of $70 million just before the recession, he said.