By Steve Dreyer
Budget cuts made over the past four years have put the City of Poway in the position of being able to finish the 2010-11 budget year in relatively good shape, City Council members were told Tuesday night.
That’s a long way from where many other cities in the region find themselves, as municipal leaders struggle to deal with declining revenue shortages by slashing budgets.
“The mid-year evaluation shows a stable General Fund operating budget,” John French, director of administrative services, said. No additional 2010-11 budget cuts will be needed, he concluded.
Poway officials began cutting budgets in 2007 when recession-related revenue sources began to decline. Since then the city workforce has been cut by 14 percent, partly through layoffs and partly through the freezing or elimination of positions as they became vacant. Employees began contributing toward their retirement plans, and spending cuts were ordered from each department head.
According the French, the cumulative effect of the reductions has placed the city in good fiscal shape.
Updated projections show the city will take in an unexpected $1 million in additional property and sales taxes by June 30, representing a 3 percent increase over projections made last summer. Due to a number of factors, including lower firefighter overtime and sheriff’s contract costs, General Fund expenditures through June 30 should be about $1 million less than budgeted, French told the council.
As adopted last summer, the 2010-11 budget totals $72.9 million, which includes a $32.1 million for the General Fund from which most city services are financed.
French’s budget update was another in a series of positive budget messages the council has received in recent months. In November, the council learned the city had closed out the 2009-10 fiscal year with a $2.4 million budget surplus. The council at the time allocated $542,120 of the general fund operating surplus into the capital improvement fund and assigned the remaining $2,104,510 to the unappropriated general fund
The city’s general fund reserve now stands at about $18.1 million. The current budget also has a $3.1 million “economic uncertainly” fund — established several years ago — and a $4.4 million street maintenance fund. It also has $2.4 million fund from which to pay anticipated higher pension fund costs over the next couple of years.
The high reserves are in part due to the council socking away budget surpluses prior to the 2007 start of the recession.
Looking ahead to 2011-12, French told the council that budget preparations are underway and that the citizen Budget Review Committee will start its review in April. The new budget will go before the council on June 21, he said.