Following a push by the City Council to heavily invest in infrastructure, the Costa Mesa Finance Department presented an early draft budget Tuesday that doubles capital improvement spending but also shows a slight deficit.
"We see this as a very preliminary document," city CEO Tom Hatch told the council. "We will come up with a balanced budget."
Currently, the proposal relies on reserves to close the gap.
The city budget grew by 15.2% compared with last year, with the "lion's share" aimed at the city's infrastructure, Finance Director Bobby Young said.
Young proposed more than $20 million in capital improvement work — a 92% leap from last year, with more than half coming from the countywide Measure M bond, gas taxes and other funds. The rest, about $6.7 million or so in the city's capital improvement fund, is more flexible and is designated for infrastructure projects.
The proposed budget shows the priority shift of this council over its predecessors. During the height of the recession, Costa Mesa reduced spending on some maintenance and relied heavily on reserves to combat declining sales and property tax revenues, which are two of the city's chief funding sources.
With the economy slowly on the upswing, the council majority has pledged to dramatically reduce employee costs and pour dollars into public projects.
More than $2 million of the infrastructure spending is expected to come from cutting the city's police helicopter program and scaling down the Police Department.
Salaries and benefits make up about 60% of Costa Mesa's overall spending, according to city data.
Like last year, the city plans to have about $1 million set aside as a contingency. This fiscal year, some of that money has gone to paying for consultants and projects.
Mayor Pro Tem Jim Righeimer criticized the presentation, saying it's not city staff's job to try and balance the budget. His preference is for administrators to list the city's spending needs so the council can then prioritize them.
Righeimer estimated the budget deficit — based off a schedule of city needs designated earlier this year — at more than $10 million.
Councilwoman Wendy Leece called the document merely a wish list and that it shouldn't be used to dictate other cuts in the city.
The council will host a series of study sessions on the budget over the next month, where they'll determine sections to add and trim.