If the 2017-18 budget proposed Tuesday is approved in July, the city will allocate an additional $40,000 toward assigned sheriff’s patrols and see its financial reserves drop below 100% of operating expenses and revenue totals for the first time in years.
In the first of three or four planned budget meetings this year, council members reviewed the city’s financials: In the upcoming fiscal year, LCF expects to bring in a total of $13.863 million and to have $13.118 million in expenses, leaving a balance of $745,550 for council consideration items.
Those items include $359,375 in requests from various community groups, whose members will make their pitches to council members at 8:30 a.m. on Monday, June 26. Before that, the council will hold its second budget hearing at 8:30 a.m. today, June 22, and then, if a fourth hearing is necessary, at 8:30 a.m. Wednesday, June 28.
But first, City Manager Mark Alexander offered council members a historic perspective on the city’s revenues and expenditures, explaining that in 2015-16, the city reached its revenue peak at $14.165 million before experiencing a drop this fiscal year to $13.502 million.
“We’re feeling the first impacts of the loss of sales tax generation from Sport Chalet,” Alexander said. “Not all of that can be attributed to Sport Chalet, but the lion’s share was a result of sales tax reduction.”
Sales tax in 2015-16 was $2.813 million; in 2016-17, it’s estimated to be $2.687 million. Alexander said he doesn’t expect a notable increase in sales tax in 2017-18 even though IDS Real Estate Group has indicated it could reveal a new tenant — a national retailer, according to IDS Senior Vice President Rob Fuelling — by the end of the month. That occupant, Alexander said, isn’t expected to be prepared to open its doors for another year.
In 2017-18, Alexander said the city forecasts sales tax to be $2.731 million.
The city’s carefully guarded reserves diminished following the $5.5-million down payment on the $11.23-million purchase of the former Sport Chalet corporate headquarters building for the new City Hall. The reserves fell from 153% when compared with operating expenses in 2015-16 to 104% this year. Those reserves were 127% as compared to revenue a year ago and are estimated at 95% in 2016-17.
Next fiscal year, Alexander said those reserve levels — which council members for years have tried to keep between 100-150% of operating expenses and revenue totals — will dip to 95% of operating expenses and 91% of revenue.
“We’ve made a concerted effort over the years to keep our expenses below our revenue and this is what’s allowed us to return monies to reserve often,” Alexander said. “And you can see how our reserves have increased throughout the years.”
Among the items discussed Tuesday, council members indicated they are in favor of dedicating $185,000 — an increase of $40,000 — to specially-assigned patrols and to pay for a community services assistant who will free up deputies to spend more time patrolling.
“We feel that would be very beneficial to free up the two cars we have assigned here,” Operations Lt. Marjory Jacobs said.
LCF Defines Budget; Reserves to Slip in 2017-18
