Poway finishes past fiscal year in red; Current year looks better

By Steve Dreyer

A new report to be reviewed next week by the City Council confirms what leaders have been saying for months, that the 2011-12 fiscal year ended in the red.

A final accounting of the year ending on June 30 showed the $34.64 million general fund, from which many city services are funded, came up $228,104 short. Officials blamed the shortfall primarily on the state’s Feb. 1 dismantling of the local redevelopment program.

City Manager Penny Riley said the deficit will be easily covered by the city’s ample reserve funds and predicted that the 2012-13 budget will be balanced. That is a change from her prediction last summer that the general fund would be $500,000 out of balance. However, the city’s recent successful refinancing of bonds used to build City Hall will help balance the 2012-13 general fund, she said.

While the general fund has run in deficit mode in several prior years, the report marks the first time the fact has been publicly disclosed. Riley said that she disclosed the fact this year “for the sake of transparency.”

In past years, when a general fund ran in the red, capital improvement projects such as street work and water and sewer system upgrades were simply deferred for a year, easing the budget crunch. That is not the case this year, she said.

The budget deficit was subsidized through the allocation of reserve funds. The general fund had a June 30 ending balance of $18.1 million. In addition, the city has a $3.1 million Economic Uncertainly Fund, which the city built up during a succession of strong fiscal years. It also has $4.48 million in a Street Maintenance Fund and $2.4 million in a Pension Stabilization Fund, according to Scott Edwards, director of administrative services.

Governor Jerry Brown and the Legislature abolished hundreds of local redevelopment agencies on Feb. 1. Since Poway had no employees assigned full time to redevelopment tasks, portions of their municipal salaries were financed though the general fund with redevelopment property taxes. Also, the state prohibited the former redevelopment agency from repaying a $500,000 loan made from the general fund.

Looking forward, the report by Edwards says “the city is showing signs of benefiting from the continued recovery of Poway’s economic sectors.” Sales taxes revenues are slowly increasing in line with budget projections and “no (budget) adjustments are proposed at this time.”

The City Council will meet at 7 p.m. Tuesday, Dec. 4 in the council chambers, 13325 Civic Center Drive.

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Posted by Steve Dreyer on Nov 26 2012. Filed under Local News, Poway. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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