Many other government agencies continue to grapple with recession-driven budget deficits, but La Cañada Flintridge is looking forward to a sturdy bottom line over the next five years.
City Finance Director Daniel Jordan told council members during their mid-year budget review last week to expect narrow budget surpluses in all but one of the next five fiscal years.
While he cautioned that city officials may have to tap up to $32,000 of city’s $14 million in reserves to balance the books in fiscal year 2013-14, Jordan projected a surplus of more than $300,000 in 2015-16.
But with state finances in flux pending the fate of proposed tax extension ballot measures, Mayor Dave Spence said city leaders will remain cautious in their optimism.
“Our budget outlook is positive, but we need to take a guarded attitude toward the state government regarding what they might take away and how they try to balance their budget on the backs of local government,” Spence said.
Jordan’s financial projects see property tax revenue climbing gradually over the next five years to remain in pace with city expenditures.
These costs include employee salaries and retirement costs, which Jordan expects to increase only moderately.
Unlike other government agencies, especially those in the immense state bureaucracy, employee pension costs represent only a small portion of the city’s budget.
This fiscal year, city contributions to the state employee retirement system (CalPERS) will amount to $431,835, or about 3.58% of the city’s $12,133,400 general fund budget, said Jordan.
Next fiscal year, the city’s pension obligation will increase to $476,483, or 4.2% of that year’s total budget.
Pension costs will rise to nearly $596,581 in 2015-16, or about 4.7% of that year’s expected budget.
“It’s always a concern of ours, but as usual, La Cañada Flintridge has been more conservative than most cities,” said Councilman Donald Voss. He said the city’s pension costs “are relatively under control, and that hasn’t always been true of other agencies,” he said.
Because La Cañada Flintridge contracts with the county for police, firefighting and public works services rather than maintaining its own agencies, there are only 24 full-time employees at City Hall.
South Pasadena, which maintains its own fire and police departments, has 145 full-time employees, said city Human Resources Manager Tom Cody. In fiscal year 2009-10, South Pasadena paid $2,438,113 into employee retirements, about 10.6% of its $22,897,745 general fund budget.
Temple City, which like La Cañada contracts out for essential services but has 12 more full-time employees, is spending $540,940 on employee pensions this fiscal year. That’s about 5.3% of its $10,157,220 budget — a greater portion of total expenditures than La Cañada expects at any time during the next five years.
“It has a lot to do with being a contract city, but for the last 15 years or so, the city has worked diligently to control retiree costs,” said Spence.
Although the city winds up absorbing some of the L.A. County Sheriff’s Department’s retirement costs through its annual contracts, Spence said it’s easier to plan for a flat fee.
The city is spending $2,037,650 on law enforcement services this year — a cost that by 2015-16 will go up to about $2,517,176.
Including a 1.76% salary increase approved by council members on Monday, City Hall will spend a total of $2,060,520 on full-time employee salaries this fiscal year. Annual raises based on the consumer price index could increase that price tag to about $2.3 million in 2015-16, Jordan said.