The South Pasadena City Council has passed a $28.3 million Fiscal Year 2019-2020 general fund budget for the city. The approval, at the June 5 council meeting, came after several months of public meetings on the budget.
Also approved by the council was the city’s Capital Improvement Plan for FY 2020-2024.
The approval of both was unanimous. Although a public hearing on both the budget and Capital Improvement Plan was scheduled for the meeting, no members of the public sought to speak on the matters. There had been several community meetings on the budget in recent months and the Finance Commission had reviewed the budget on May 23 and had recommended approval. The Capital Improvement Plan had gone before the Public Works, Planning and Finance Commissions during which times the public had an opportunity to speak. The plan had also been presented at the May 1 city council meeting.
There was no discussion on the budget by councilmembers or staff at the June 5 meeting and the resolution to adopt the budget was moved to the consent calendar during the meeting. Items on the consent calendar are generally non-controversial items that do not require much, if any, discussion. The consent calendar allows the council to approve many items all at once.
“Those items we have talked about before several times,” Mayor Marina Khubesrian said at the meeting about the budget and the Capital Improvement Plan
At this point in time, the budget is balanced with a growth in expenditures matched by a similar growth in revenues, according to a staff report. The report also said that community priorities based on public comment and a community survey were taken into consideration. Priorities include infrastructure improvements, street repairs, emergency preparedness and economic development. The budget does not include any new city staff positions.
The budget anticipates general fund revenues of $28.6 million, a two percent increase over last year due to increases in property taxes. General fund expenditures are $28.3 million.
The city’s main expenditures are $19.9 million for personnel (70 percent of budget) and $6.2 million for operations and maintenance. Personnel costs for pension liability, workers compensation and health insurance have all increased. The city is currently in labor negotiations with city workers and this could also lead to cost increases.
A staff report indicated that South Pasadena employees have not received salary increases over the last two years and received only marginal increases in prior years. South Pasadena employees are currently paid 10 percent-30 percent below the average of comparable small cities in the San Gabriel Valley, according to a survey of compensation.
Another looming cost increase is pension liabilities. City of South Pasadena Public Information Officer John Pope said this year’s CalPERS pension payments are covered in the upcoming budget but how it will be paid in coming years is uncertain at this time.
Before the budget was adopted, the city conducted a series of public meetings throughout March and April to present a five-year general fund forecast and discuss long-term financial sustainability. A deficit of approximately $500,000 was identified in FY 2019-2020 increasing to almost $1 million over the five-year projection, according to a staff report. When other variables are included such as pension costs, capital improvements and other strategic plan goals, the deficit is more than $1 million in year one and almost $2 million in year five, the report said.
Potential revenue increase ideas have been discussed as well as potential expense reductions.
The city presented a Financial Sustainability Plan at the May 15 meeting and gave the public from May 15-31 to make comments and suggestions through email at email@example.com. The city received only three emails, according to the staff report.
“I think there will be opportunities to amend the budget as issues come up,” Khubesrian said.
The Capital Improvement Plan includes $11.8 million for 18 projects in FY 2019-20. Of that amount, $2 million is coming from the General Fund and $9.8 million from special funds and grants. There are 46 projects in 2020-2024 totaling $153 million of which $44 million is unfunded.
In other issues at the meeting, the council received annual department reports from Police Chief Joe Ortiz and Fire Chief Paul Riddle and granted the appeal of a decision by the Natural Resources and Environmental Commission. The council’s decision will allow the removal of two non-native trees at 1921 Illinois Drive.