South Pasadena City Council members authorized city staff last week to proceed with the preparation of the final 2017-18 budget.
General fund revenues for the new fiscal year, which begins on July 1, will be directed toward a variety of areas, a sizeable amount to support street improvements.
“I have to say it’s a very healthy street budget,” said South Pasadena Interim City Manager Elaine Aguilar. “This city really does emphasize giving large amounts of its funds to maintaining its infrastructure. For a city this size, to see what it spends on streets is really impressive.”
Roughly $2.1 million will be spent on roadwork around town.
Large amount of funds will be directed toward drainage improvements at Library Park and Heritage Park at the Mission Meridian Ironworks, making sidewalk repairs, the purchase of four vehicles for the South Pasadena Police Department, a GNC truck for the street division, general tree maintenance, and a new band-shell for Garfield Park.
The City Council approved drawing down the undesignated reserves 1% taking it down to 25% overall to help replenish the Equipment Replacement and Maintenance Fund.
Future Street Improvement Projects
- Monterey Rd. – Via del Rey to Pasadena Ave. “Final Phase.” $425,000
- Preventative Maintenance – Various. $300,000
- Bushnell Ave. – Oak St. to Huntington Dr. $400,000
- Diamond Ave. – Monterey Rd. to Lyndon St. $180,000
- Camino Del Sol – Saint Albans Ave. to Santa Teresa. $450,000
- Alpha Ave. – LaFremontia to Valley View Rd. TBD
Aguilar is anticipating cost increases to the overall budget in the future. “The city is projecting that by fiscal year 2020-21 we will be running at a deficit. At that point, as we look at a cash flow model, it assumes the city continues to receive the utility users tax,” she said, explaining there’s a measure on the November ballot to eliminate the utility users tax in the city.
The tax brings in about $3 million to the city’s coffers. “If that happens you can roughly add a $3 million deficit to the annual budget,” said Aguilar. “It will have a significant drastic impact on the city’s budget.”
The interim city manager said it is good to be out in front of projections. “The more you have time to plan for the future, the better,” said Aguilar. “You have a lot less options available to you when you wait until the last minute to start dealing with a negative financial situation.”
In addition, there’s the concern about the growing costs of the public employee retirement system. It is estimated that the city is going to spend more than $21 million in the next five years for pension costs.
Cash flow for the next five years is also concern for city officials, with expenditures overtaking the anticipated revenue. Although the city is fairly stable in terms of revenues, Aguilar stressed that the city is facing some challenges in the next few years as a result of expenditures continuing to rise.
Formal approval of the 2017-18 budget is expected come during the June 7 City Council meeting as part of a public hearing. “The budget document will be available at that time and online, so the public can take a look at it before the meeting,” explained Aguilar, noting that “nothing significant when it comes to the city’s bottom line” was changed when the city studied the budget and reserve levels during its regularly scheduled May 17 meeting at City Hall.