Due to revenues continuing to be down from projections, Los Alamitos is in the midst of a nearly $600,000 budget shortfall for the current fiscal year.
As part of a budget workshop Monday, March 15, Assistant City Manager/Finance Director Nita McKay said that General Fund Revenues were down from $4.2 million to $3.9 million, or seven-percent for the second quarter of 2010 when compared to a year ago.
Expenditures were down from $5.7 million to $5.2 million, or about eight percent during the same time frame.
For the fiscal year ending June 30, the city is expecting to have about a nine-percent drop in revenues, or about $1 million, while seeing a five-percent drop in expenditures, or about $600,000.
Much of the reason for the mid-year shortfall is revenues coming in less than expected.
In 2008-09, actual property tax revenue came in at $2,852,534.
This year’s property tax revenue is projected at $2,758,310. Projected sales tax revenues are expected at $2,122,000, or nearly $375,000 less than 2008-09’s actual numbers.
Fines and forfeiture monies are expected to be down nearly $132,000 from actual monies collected a year ago.
While there has been an increase in red light camera monies coming in, there has been a decrease in the number of moving violations.
That was due to the city losing a motor officer during the current year and eventually having to replace him.
There is some positive revenue news.
The city is expecting to receive about $63,000 more in licenses and permits, thanks in part to a large Verizon public works project.
To make up the shortfall, cuts have again been made to city departments. Some of the largest include one-time salary savings in community development and the police department. Other cuts include a 10-percent pay cut city wide.
“There are positions in several departments that have not been filled and won’t be until possibly the next fiscal year,” McKay said. That includes two police officers, one assistant to the city manager position and a maintenance worker.
Cuts are expected to save about $400,000 with the rest of the deficit, approximately $215,490, coming from a budget surplus the city had at the end of the 08-09 fiscal year, which is part of the city’s General Fund Balance.
The balance, which has been spent down in recent years, sits at $6,129,940.
Council member Gerri Mejia says spending down reserves is not the way to go.
“Staff has made tremendous cuts, for which we are grateful,” Mejia said. “We keep having to readdress revenues, which isn’t the right thing to do.”
City Manager Jeff Stewart says the city never seems to hit projections. “I’m glad we waited (until now) instead of coming back and saying we’re even going to be more short,” Stewart said.
Council members Troy Edgar and Dean Zarkos said they couldn’t support staff recommendation of approving the budget review because they did not trust the revenue numbers submitted.
