Escondido council to consider $106.1 million budget

By: PAUL EAKINS - Staff Writer | Friday, June 8, 2007 11:44 PM PDT ∞

ESCONDIDO ---- Library renovations, a new downtown hotel and projects aimed at improving the city's image and appearance all are planned under the city's proposed 2007-08 budget.

The Escondido City Council is expected Wednesday to consider approving a $106.1 million budget for the fiscal year that begins July 1. That's 21 percent larger than the $87.7 million the city was projected to spend this fiscal year. The city's 2005-06 budget was $77.4 million.

Low sales tax revenue has forced the conservative, diverse city of 140,000 to make some cuts, continue a hiring freeze and use more than $1 million from its economic uncertainties reserve fund for next year, city officials said Friday.

City Manager Clay Phillips said using money from the $13.1 million reserve fund was the best solution for the city to provide services next year at current levels.

"You don't have to close a library, you don't have to cut hours," Phillips said Friday. "It's good fiscal management is what it is."

The city already plans to use $2 million to $3 million from the reserve fund to make up for an expected budget shortfall in the current fiscal year, he said. The city initiated a hiring freeze after discovering in April that sales tax revenue had dropped 8 percent, or about $4.2 million, in the first half of the 2006-07 fiscal year.

New business developments, such as a planned downtown Marriott hotel, should increase sales tax revenue so the city won't have to rely on reserve funds to balance upcoming budgets, Phillips said.

Major projects in 2007-08 that will be paid for through previously allocated funds and reserves include:

- the Marriott hotel, a $56.3 million project to which Escondido will contribute $15.2 million in 2007-08.

- $1.3 million for the city's ongoing project of placing utility lines underground.

- $1.27 million for renovations to the Escondido Public Library at 239 S. Kalmia St.

- $765,000 for the city's Appearance and Compliance Team, which is composed of multiple city departments that work together to enforce city health and safety codes, clean up graffiti and take other action to improve the city's appearance.

These projects have created an unusually beefy budget for Escondido, despite the decreasing revenue.

The city's operating budget for day-to-day functions is projected to hit $85.6 million, a 1.6 percent increase over the $84.3 million budget for 2006-07 and 12.4 percent more than the $76.18 million operating budget for 2005-06.

Revenues are expected to be $84.8 million in the coming fiscal year, compared with $82.18 million expected for the current fiscal year and $82.4 million for 2005-06. The city is projected to receive $25.1 million from sales tax, a source that makes up the largest single portion of city revenues, compared with $24.2 million estimated for 2006-07.

In the proposed operating budget, the largest pool of money would go to the police department ---- at $35.5 million, slightly less than the current $36.2 million ---- and the fire department/emergency management, at almost $18.3 million, up slightly from the current $17.9 million.

To balance the budget, city officials had asked department heads to make cost-cutting measures, which included reducing outside contracts, advertising, printing and the number of training sessions and meetings,

Eleven vacant positions in various departments would be frozen under the new budget, including a police captain position.

Phillips said the city will provide the same services as it does now but that some departments could feel the effects of the hiring freeze.

"At this point in time, there could possibly be some slowdowns in the processing of things," Phillips said.

As other city employees leave their jobs this year, those positions also could be left vacant, city Finance Manager Joy Canfield said Friday.

City officials will "probably continue to look at positions, and if they're not critical, they'll probably think about freezing them," Canfield said.

The city has budgeted for less police and fire department overtime as well. But if an incident happens in the coming year that requires many hours of overtime, such as the fire that burned the Paramount condominiums in January, city officials will need to ask the City Council for extra cash, Phillips said.

As always, budget adjustments will have to be made throughout the year as revenues and expenses change, he said.

"You never know how an economy goes," Phillips said. "Projections are just projections."

The council will meet at 4 p.m. at City Hall, 201 N. Broadway.

Contact staff writer Paul Eakins at (760) 740-5420 or peakins@nctimes.com.