Carlsbad Preliminary Budget Estimates Small Surplus
CARLSBAD – Despite a pandemic, the city is forecasting a modest surplus, as well as the creation of a new homeless department during its preliminary operating budget for fiscal year 2021-2022.
Additionally, Carlsbad City Council will also consider adding a position on diversity, equity and inclusion, as urged by Councilor Priya Bhat-Patel at the May 18 council meeting. The city is also investing significant sums in its IT infrastructure to be more vigilant against potential cybersecurity threats.
In total, the operating budget is estimated at $ 303.6 million, with the general fund operating budget projected at $ 184.2 million and income at $ 178.8 million.
The board must approve the final budget by July 1.
“We’ve focused our attention on crafting this budget around the four priority goals and why we’ve really blended those funding sources to match them,” City Manager Scott Chadwick said.
According to Chadwick, this was one of the most difficult budgets to produce due to the challenges of the pandemic. Chadwick said the city will no longer allow departments to carry over surplus funds for next year, as those funds will be reallocated to the General Fund for the next fiscal year.
And due to the constraints, he said some projects will not come to fruition this year.
In addition, the board will consider the staff recommendation to allocate $ 10 million to its retirement debt for CalPERS and to transfer $ 3.5 million from general fund reserves to the infrastructure replacement fund.
Mayor Matt Hall, however, was hesitant about the allocation for CalPERS, saying he wanted a more in-depth look at the city’s bonds, noting that the city had paid $ 50 million in recent years.
City staff are also proposing to hire 31 new positions, including three for the homeless, 15 firefighters, paramedics and emergency medical technicians and to create the housing and homeless services department, which includes at at least three new posts, according to the staff report.
The operating budget increases by 2.4% compared to the 2019-2020 fiscal year, largely due to the rebound in the economy after the COVID-19 pandemic and the associated revenue losses from all sectors of the economy.
General Fund revenues are expected to increase by $ 6.1 million, the largest projection coming from the transitional occupancy tax (hotels). The city estimates a 46.5% increase in TOT, 10.5% more in sales tax and 4.8% in business license tax, according to the report.
In addition, expenses are expected to increase by 8.1%, including $ 20.6 million for General Fund expenses.
But the $ 483,000 surplus is the result of one-time spending of $ 5.9 million associated with city council goals. By excluding these one-off costs, the operating budget shows a surplus, according to the staff report.
As for IT upgrades, they are part of the strategic investment program in the digital transformation of the city, which was designed in 2019 and led by Maria Callander, IT director. Over the next five years, the city will invest $ 26.9 million, although $ 11.5 million has already been allocated and the 2021-22 budget calls for an additional $ 2.8 million.
This year’s projects include updating security, hardware, software, data analysis, troubleshooting, and helping meet environmental, mobility and sustainability goals.
“A project essential to the city’s digital transformation is the consolidation and replacement of our core systems,” said Callander. “The city is looking at ways to consolidate this number of systems as little as possible.”
Laura Rocha, Deputy City Manager, updated the council on unemployment, real estate and labor and how they relate to the budget. Rocha said unemployment was 5.6% in Carlsbad and 6.9% in San Diego County, while commercial real estate vacancy rates were 9.3% for industry, 14 , 7% for offices and 8.6% for retail trade.