FY 2010-11 budget study session on May 27th open to the public
Balancing budget means tough decisions ahead
LAKE ELSINORE The City Council is working to adopt a balanced budget next fiscal year as the City faces a fourth straight year of declining revenues. The new fiscal year begins July 1.
A previously announced budget study session has been rescheduled from Thursday, May 20 to Thursday, May 27, at 5:00 p.m. in the Cultural Center, 183 North Main Street, to discuss the preliminary budget. This special meeting of the City Council is open to the public.
The FY 2010-2011 budget is scheduled to be adopted at the first Council meeting in June.
According to Mayor Melissa Melendez, “With fewer taxpayer dollars available next year, the goal is meeting community needs and providing services in the best manner we can afford.”
Closing a projected $3.8 million gap in the operating budget will require tough decisions by staff and the City Council.
General fund revenue in FY 2010-11 is down by $2.8 million and anticipated expenditures are nearly $1 million over the current fiscal year budget.
Available options to balance the budget involve budget trimming, reducing contract expenses and direct labor costs, using “rainy day” funds, or supplemental revenue, and finding new revenue sources.
A $3.5 million dollar reserve fund will not be touched in any way, officials say.
The City still has $1.4 million in “rainy day” funds that can be spread over one year or more.
The $2.8 million revenue decrease is due to three factors:
- The downward reassessment of property values equates to a $300,000 or 4.74% decrease in property tax revenue;
- One-time funding of nearly $400,000 won’t be available next fiscal year that was used to help balance the present fiscal year;
- Dependence on $2.3 million in “rainy day” supplemental revenue to balance the present budget leaves only $1.4 million available to help reduce the deficit, though how much to set aside beyond FY 2011 will be up to the City Council.
Public safety expenditures—namely police and fire—presently account for over half of the City’s operating budget.
Officials are currently meeting with Riverside County Sheriff’s Department to find ways to offset contract cost increases. To maintain the existing level of police services in FY 2010-11, the City will have to pay 5% more, or $465,000. The existing contract for law enforcement totals $9.3 million per year.
City management will meet and confer with bargaining unit representatives about their current Memorandum of Understanding (MOU) and potential budget options. The existing four-year labor contract is entering its final year in FY 2010-11.
By comparison, last year, when the City had less, employees took less. Employees agreed to accept a combination of 24 furlough days and no COLA or merit increases for one year. The savings to the City’s general fund this fiscal year is over $780,000.
Opening a new animal shelter by year end will add $210,000 to the City’s budget in FY 2010-11. The full annual obligation will be $600,000 beginning in FY 2011-12.
The City and Elsinore Valley Municipal Water District have an agreement in place whereby each is to contribute $650,000 annually to the lake stabilization fund. This has been suspended this fiscal year by mutual consent, but may need to be included in the FY 2011-12 budget.
In a separate development, the Lake Elsinore Redevelopment Agency met a May 10 deadline to return $6.98 million in Redevelopment Agency funds to the state of California, part of a $2 billion grab by the state to help balance its deficit budget.
“We will look in every single area of the budget to reduce our expenditures, no stone will be left unturned,” said Mayor Melendez.
Revised 5/18/2010 at 2:30 p.m.
The City of Lake Elsinore features Southern California’s largest natural freshwater lake. The City’s current population is estimated at 50,267. The City’s brand and slogan, “Dream Extreme,” exemplify the scenic beauty and active life style of this 122 year old boom town. Visitors and residents enjoy water sports such as skiing, power boating and fishing, world-class sky diving drop zone and thermals, a regional motocross track, professional baseball, an 18 hole golf course, outlet shops, plus dining and entertainment in Historic Downtown. The City’s Web site is www.lake-elsinore.org.