OCEANSIDE — The five-year Financial Forecast for Oceanside is steady with recommendations to roll over expenditures and continue to pay down climbing PERS costs.
“We’re steering ourselves down the right path,” Councilman Jack Feller said. “I think Oceanside, for a city that is a little more blue collar, is developing into a destination city with hotels, soccer and youth sports.”
Financial Service Director Jane McPherson reported at the Jan. 24 City Council meeting that city revenues have stabilized since the recession and will increase slightly in the next few years.
Greater home values and new housing, commercial properties and hotels will increase property tax and transient occupancy tax for the city.
The city also faces increased CalPERS retirement costs, due to the lowering of the discount rate. Higher PERS costs will not allow the city to invest in infrastructure repairs and additional services.
“It’s a rollover budget, we’re working hard on it,” Feller said. “For water utilities it’s a big deal, they’re a big part of the capital budget.”
Police and fire CalPERS are estimated to increase from 40.89 percent to 56.47 percent by 2022. CalPERS for other employees will climb from 28.54 percent to 39.8 percent in that time.
Overall PERS costs are expected to increase by $11.8 million in the next five years.
To help mitigate employee costs city workers will be asked to pay a higher percentage of total costs and the city will cap its contributions to health care.
City staff will also look into options to join larger pools to lower employee health care costs.
Another recommendation to ease PERS increases is to use $5 million of the $8.8 million in PERS unfunded liability set aside funds for PERS payments over the next five years.
McPherson additionally advised that the 2018-2019 budget surplus of $2.3 million not be used for new ongoing costs unless there is a new revenue offset to continue funding.
“We’re not looking to spend it,” McPherson said.
Council unanimously approved the General Fund Forecast and all staff recommendations.
“We’re in the right position, it’s pretty easy to accept it,” Feller said. “We know we have debt for various things. We’re feeling better all the way along and making our city stable and a great place to be.”
The city is in a much better spot than it was in 2009 when $7 million in city services and 32 jobs were cut from the budget.
This April council will look at the General Fund budget and consider spending some of the $2.3 million surplus on one-time costs. Any extra monies will go into the PERS set aside account.
Feller said any one-time spending would need council consensus on the good it would do for the city.
In past years one-time funds have been spent on needed fire apparatus, deferred building maintenance, opening Marshall Street Pool for the summer and funding city fireworks.