The Carlsbad City Council on Tuesday approved a $311.5 million budget for the fiscal year that begins July 1, marking the culmination of a process that includes an annual survey to find out how residents rate city services and priorities, a City Council goal setting workshop in January, and a number of City Council meetings and workshops over the past couple of months.
The budget is broken down into a $257.5 million “operating budget,” covering day-to-day city services, and a $54 million “Capital Improvement Program” budget that pays for major city construction projects.
City revenues continue to be strong, including the top three sources:
Property taxes, the city's largest single revenue source, are expected to be $64 million in FY 2017-18, an increase of about $3 million, or 5 percent, from the projections for the current year.
Sales taxes are expected to total $35 million for FY 2017-18, an increase of $2.7 million, or 8 percent, compared to FY 2016-17 projections. The large increase is due primarily to a timing difference in receipts because of an administrative change at the state level.
Transient occupancy taxes, the tax visitors pay on hotel stays, are estimated at a record $22 million, an increase of approximately $600,000, or 3 percent, over FY 2016-17 projections.
Budget priorities are set by the City Council and include spending to ensure core services are maintained at a high level. Some of the new spending in next year’s budget includes:
Adding a net total of eight full time positions to the city’s workforce, including in the areas of technology, park planning, public safety and the environment. This brings the total city workforce to the equivalent of approximately 872 full time employees. During the recession, the city’s workforce shrank by about 50 full time positions. It’s currently about 29 positions smaller than the pre-recession size.
Expanding the city’s school crossing guard program by three, bringing the total number to 30 crossing guards and 26 locations.
Continue an online crime reporting program started in 2016 as a pilot program.
New equipment for the Fire Department.
Funding for four park improvement projects at various stages of development, including Pine, Aviara, Poinsettia and Leo Carrillo.
Additional hours for code compliance staff to provide greater coverage on evenings and weekends and additional funds for the removal of junk and debris around the city.
A contract with a company specializing in managing programs to ensure short term vacation rental rules are followed.
Money for the rebuilding of Fire Station 2 in La Costa. This spending was approved by Carlsbad voters in the last election.
Traffic improvements, including road changes to make traffic flow more smoothly and safety improvements around La Costa Canyon High School.
Repair and maintenance at the Carlsbad Senior Center, which is now 28 years old.
The budget also focuses on six policy goals set by the City Council in February and support for the Carlsbad Community Vision, a set of nine core values community members said are important for the future of their city.
The City Council has a policy to maintain the equivalent of between 30 to 50 percent of its annual operating budget in a rainy day fund called a “general fund reserve account.” This helps ensure the city has money for emergencies and other unforeseen one-time spending needs.
The City Council also sets aside money each year for future replacement of city infrastructure, which helps ensure things like roads, water pipes and city buildings can be maintained or replaced as needed without having to borrow money and pay interest or defer maintenance until a later time. Almost $10 million is being set aside for this purpose in the next fiscal year.
Like most other cities, the retirement benefits paid to retired city employees are more than what is being generated by current employees and investment returns in any single year. This gap, which totals $148 million, is referred to as the “unfunded liability,” and for Carlsbad represents about 25 percent of the pension plan. To stabilize future payments the city needs to make to the employee pension system, the City Council opted to pay down $9 million of its unfunded liability. Five million dollars comes from money set aside through last year’s budget process for this purpose, and $4 million comes from the city’s reserve fund. The city’s strategy has also included reducing pension benefits for newly hired city employees and having employees pay into the fund with each paycheck.