After enduring the last few years in recession and post-recession budget constraints, the City of Manhattan Beach is finally seeing signs of recovery.
At this fiscal year’s end, the city is projected to net a $2 million surplus in the general fund, contributed by growths in property tax, sales tax and property-related revenues.
That’s why city staff are regarding the upcoming fiscal year of 2013-2014 as a necessary “rebuilding year” and the operating budget reflects that ambition, most notably with the addition of 10 full-time positions, 44 new replacement vehicles and a five-year Information System Master Plan.
A divided City Council on Tuesday adopted the $57.5 million operating budget in a 3-2 vote, with new councilmembers Mark Burton and Tony D’Errico dissenting.
Burton and D’Errico suggested that the operating budget, which is projected to net a $10 surplus by year’s end, should be more conservative to account for what they consider is a volatile economy with lingering impacts of recession.
Burton’s biggest hesitation was the projected shortfall for the unfunded projects within the Capital Improvement Plan, one of several expenditures funded by the unreserved general fund. According to finance director Bruce Moe, the fund is projected to erode down to $1.3 million by fiscal year 2016-2017 after subsidizing the storm water and street lighting requirements.
“[There are] limited funds available for any meaningful CIP projects,” Burton said, quoting City Manager Dave Carmany’s budget message. “[Carmany] notes that the demands on the general fund will grow because of subsidies … I take those seriously.”
D’Errico echoed Burton’s concerns about a shaky economy, citing that he has seen four downtown retail stores close in the last month. His own downtown business, Bella Kids, saw a 14-percent revenue decrease in the last half of this fiscal year. And as 27 percent of the general fund revenue comes from local businesses, it’s too soon to be this confident, he suggested.
“This is the first year we’re feeling comfortable,” D’Errico said. “ … I don’t think it’s time to spend it all on [the first quarter of the fiscal year]. I’d rather us take an approach where we take some of the additions planned and skew them, commit some to Q1, Q2, Q3 and Q4.”
In his presentation of the amended budget proposal to council Tuesday, Moe painted a more optimistic scenario. He listed several unprecedented financial developments that netted an additional $100,000 in the general fund, including higher rates of building permits, a grant funding and a sales tax revenue 10-percent higher than predicted.
Plus, he suggested that the proposed expenditures are not as grandiose as they sound. The cost of adding 10 new full-time positions, which includes a management analyst, three information system specialists, two MBPD administrative clerks and a community services officer, is offset by part-time hours and in total nets just 3.27 full-time equivalent at an additional cost of about $378,000.
Additionally, the $2.1 million expense from the purchase of replacement fleet reflects a two-year span, with 21 of the 44 vehicles re-budgeted from this past fiscal year.
Councilmember Wayne Powell, who along with Mayor David Lesser and Mayor Pro Tem Amy Howorth voted to adopt the operating budget, called it “sound and conservative” and said the proposed expenditures, particularly for public safety, are reasonable.
In a separate motion, council unanimously adopted the Gann Appropriation Limit – an annual cap on tax proceeds a local or state agency can legally spend—for fiscal year 2013-2014 at $64.9 million.
