City leaders in Paso Robles foresee general fund revenue gains over the next five years to keep the city in the black.
“With the recession over and recovery on the way, this latest forecast projects small, but favorable financial results,” City Manager Jim App wrote in a report slated to go before the City Council tonight.
Revenue in the city’s core services fund is budgeted for $24.6 million in the fiscal year ending June 30 and could grow to nearly $27.9 million in fiscal year 2016-17, according to the forecast.
The projections show that sales tax, hotel bed tax, business license fees and other revenue will help the general fund gain about $2.1 million through the next five years.
While the fund — which covers basic city services such as police, library and parks — hasn’t been used for deficit spending, App said the projections don’t include restoring programs cut during the recession. Those cuts include trimming staff by 33 percent through a hiring freeze, nixing most maintenance and closing a city pool at Centennial Park.
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A goal-setting workshop with the council and the public is slated for March.
“Many are impatient to get back on track, to restore what was — public services, programs and facilities — and understandably so,” App wrote in an email.
Still, he cautioned the council to show “continued fiscal discipline” so the city’s budget can remain sustainable through tough financial times.
Plus, the forecast excludes expenses set aside during the recession that may need to be picked back up.
City-owned building and facility repair costs, for example, would cost the city an average $400,000 per year, App said, should the council opt to do so.
He also noted that the city’s vacation accrual policy — which sets no caps for how much unused vacation time employees can store — is being reviewed.
Should the council consider how to pay those sums down, the cash-outs could result in expenses of about $200,000 per year.
Tonight’s fiscal forecast will also update the council on other city accounts including the water and wastewater funds, the transit fund for local bus service and the airport Fund, all of which App said are stable but have their own issues. In addition, the city has about $10.9 million in general fund reserves this fiscal year.
The city’s voter-approved half-cent sales tax increase, which goes into effect April 1, is expected to generate an additional $3.5 million annually, but it will be tracked separately because residents earmarked it to fix roads.
Reach Tonya Strickland at 781-7858. Stay updated by following @tstrickland on Twitter and checking out www.facebook.com/SLOTribuneNorthCounty.