At the June 12 Escondido city council meeting a report by the staff on the proposed operating budget for FY 2019-2020 pointed out that over the next 18 years the city faces a $176 million budget gap.
The much more detailed staff report than in previous years reflected the desire of the new city council that took office in January, and which asked for a more transparent and detailed budget—and much more citizen oversight and input.
But this also drew some criticism from Mike Morasco, who said too much oversight and input could drag out the process and create more work for staff. “That’s why we got rid of it originally,” he said.
The staff recommended looking at the possibility of adding on a ½ cent sales tax to the existing 7.75% that would bring it into line with several other cities.
The staff report asked the council to allocate $50,000 to pay for a survey to gauge the public’s views on a possible sales tax increase, as well as the public’s overall approval of how the city does its job.
This year’s budget has included several opportunities for public input, including two community meetings and three council budget meetings. Next year the goal is to also to use a community survey to get public input on budget priorities.
According to the report the city collects $293.5 million in revenue, of which 49 percent is enterprise revenues, i.e. fees collected from water and wastewater, and which is mainly dedicated to funding payment of debt. The amount expected to be collected this year will be Water, $63.9 million and Wastewater, $80 million.
The General Fund makes up 36 percent, and is the operating fund that pays for police, fire and library.
The great majority of funding for the general fund, about 77%, is raised through taxes. With sales taxes being the largest, followed by property tax. The amount these taxes raise is dependent on the economy. In the years of the Great Recession, the city saw a 1 percent dip in tax revenues.
Charges for city services makes up 11% of city revenue and includes such things as fees the city charges for providing services, paramedic fees and parks fees.
The report predicts that this next fiscal year will see tax revenues increase by a moderate amount.
The existing 7.75% sales tax is very dependent on the economy. Property taxes revenues are not nearly as sensitive to the economy.
The report noted that the city is more dependent on sales tax than other cities in San Diego County.
The $413.4 million expense budget includes 51% for capital projects, 26% for the general fund and 21% for enterprise funding, such as water and sewer.
The general fund of $106.8 million goes to fund police, fire public works, engineering, community services, community development and general government.
In the new budget the general fund will increase by 4% over last year. Most of that increase is accounted for by employee services, including increase salaries and a 10% increase in the PERS pension fund the city pays for its employees.
According to the report, 85% of the budget is related to personnel or personnel services. And 63% is salaries. More than half of that amount goes for public safety, i.e. fire and police.
The cost per resident for police is $266 a year. This pays for about one sworn officer per 1,000 residents, which compares to 2.17 officers per thousand for the U.S. and 1.28 officers per 1,000 for the San Diego region.
According to the report this cost per capita is one of the lowest in the county, comparing to $447 (the highest) for Oceanside, and $194 (the lowest) for Chula Vista and $324 for the city of San Diego and $322 per capita for the region.
Crime in Escondido is slightly lower than other jurisdictions. In Escondido the COPPS or community policing philosophy has become the guiding principal embraced by the entire police department. COPPS is involved in over 20 community partnership, youth gang and drug intervention programs.
Between 2017-2019, community partnerships allowed the city to save 60 homeless residents from living on the streets. Which means that 1,695 police calls for service DID NOT happen.
The Escondido Fire Dept. has seven fire stations. Per capita spend for Escondido residents is $160, compared to $170 for Oceanside, $194 for San Marcos, $202 for Carlsbad and $221 for Vista, making Escondido’s per capita expenditure among the lowest of nearby cities.
The fire department has 108 field personnel and 14 support staff. It has implemented cost saving measures by staffing ambulances with non-safety paramedics. The fire budget is $24.746 million.
The third largest expenditure is for enterprises expenditures, i.e. water and sewer, which makes up 21% of the budget. The water budget for the upcoming fiscal year is $56.8 million and $29.4 million for wastewater. This is an increase of $1.8 million over last year, mainly due to salary increase and PERS increases.
According to the staff report the city is looking at a project funding “gap” of $175 million over the next 18 years to maintain city services at current levels.
The report suggested that raising the sales tax by ½ cent would possibly close the gap.
The reported recommended conducting a survey of the public to gauge support for such an increase. The survey would cost about $50,000.
Councilmember John Mass said, “I’d also like to get feedback on the expansion of the library. Its’ an important time to gauge community support for that.
“All that could be done,” said City Manager Jeff Epp. “That’s the gist of what the survey would cover. To touch base with the residents. Do people prefer a central base library, for example. Although the survey comes up in context of the budget, the council has talked previously about reaching out to the residents.”
Councilmembers Olga Diaz and Consuelo Martinez both said they wanted to have input into what kind of questions would be asked.
Epp said the council would certainly have input on that.
Diaz said she wanted to guide what type of questions to ask the community. “I understand wanting to set aside the money now, but don’t go ahead and hire the consultant. We want to drill down on something that will be actionable. It’s new to us at this city to do something like this.”
Diaz added, “I feel there are gaps still in the dialog.” She said she wants to look at selling city land and cutting expenses and in reestablish the council budget subcommittee that used to be part of the budget process years ago. “That’s how it used to be and it’s important,” she said.
She added that she was tired of “continuing to spend money on a losing golf course.” But she was also alarmed by some of the language in the report that used “radical” and “elimination.” “You’re freaking me out,” she said. “We haven’t given any direction to do anything radical yet.”
Councilman John Masson said, “No question we have a serious challenge ahead of us. I’m not jumping on a tax increase yet. Regarding the golf course that constantly hemorrhages money, Masson said he hoped that disk golfers might help close the gap.
Councilmember Mike Morasco quipped that the way to close the gap in city expenditures would be to bring the beach up to the city limits. “I don’t think anyone is really excited about the tax increase proposal,” he said. “It probably is the most efficient way to get it done in one fell swoop. But I’m willing to look at any proposals to eliminate this budget gap.”
Councilmember Consuelo Martinez said, “I’m not a fan of sales tax increase. I feel like there are other things we could do first. “
Mayor Paul McNamara praised the people who put together the budget using the new format. “I think we have a budget that will get us there. We have a year to tell us what to do going forward. We are going to find out from our community where we want to spend the money. What are our values What do we think is important. It’s going to cost money. A reduction of even 10 percent is going to be a big deal.”
The mayor issued an appeal: “We really need the input from the community. We want more community dialogue than in the past. I would be supportive of a guidance committee. I don’t think anyone wants to pay more in taxes, but we have a really tough challenge facing us not this year, but the following year. I twill take a year to figure it out.”
Epp said “the game plan is to get this budget squared away, take feedback, establish some kind of citizen oversight and bring it back as a policy buy in. Not this summer, but probably in the fall. At the beginning of the budget cycle.”