OCEANSIDE — A budget forecast shared at the City Council meeting on Wednesday, included the good news that the city’s general fund is projected to see a $4.2 million increase due to higher property tax, sales tax, and other increased revenues.
Currently city finances look sunny. Property tax is expected to increase by 3.3 percent, and transit occupancy tax will see a positive jump with the recent opening of the SpringHill Suites and continue to rise 2.2 percent beyond that.
City Manager Steve Jepsen gave the city kudos for bringing back the reserves.
“Coastal San Diego has done better than other parts of the state,” Jepsen said.
A look back showed there was a peak in reserve funds prior to the recession, followed by a gap in revenues in 2009-10 that the city covered with its reserves.
“Now we’re out of the recession and will slowly see an increase in revenues,” James Riley, city financial services director, said.
Councilman Gary Felien called the years of dipping into reserve funds a period of budget deficit.
Mayor Jim Wood defended the city’s decision to use reserves to balance the budget and maintain quality of life services for residents.
“We used reserves because we couldn’t cut any deeper,” Wood said.
Regionally Oceanside still ranks lower than most cites in sales per capita.
Carlsbad ranks the highest in the region due to its auto dealerships, shopping outlet and mall.
Councilwoman Esther Sanchez said the news is a “kick in the pants” to do something to increase sales generating businesses.
Sanchez added she is concerned with the city’s low jobs to housing ratio.
“We need to stop flipping commercially zoned land into residential or we’ll never get sales tax up,” Sanchez said.
There was also the news that CalPERS rates will likely continue to go up. Pension costs including obligation bonds are already 19 percent of the budget.
Councilman Jerry Kern suggested that the city hold on to the one time $4 million surplus and see what happens with PERS rates, which are presently given as a range.
Perhaps a foreshadow to upcoming budget workshop talks, Wood said he does not want to balance the budget on the backs of city employees, and would rather fund quality of life services than have a high balance in the city’s reserve.
Prior to the City Council meeting Wood expressed frustration about going into the upcoming budget workshop with a City Council majority of Councilmen Kern, Felien and Jack Feller, who might “do what they want” when it comes to budget decisions.
The budget workshop is being held to give city staff a sense of the City Council’s priorities, and direction to put together a 2014-15 budget that will be voted on in June.
The budget workshop will be held at 2 p.m. March 12 at the San Luis Rey Water Reclamation Facility.