By Chris Orlando
The San Marcos City Council approved a balanced budget for the City of San Marcos, continuing to maintain strong reserves and make investments in assuring the strength of the city’s infrastructure. The city ended the current fiscal year with a surplus, which the Council directed be used to shore up reserves and pay down pension obligations. This year’s budget allows the city to add to its strong fiscal foundation, continuing to invest in public safety, add parks and amenities, and keep our roads and buildings in good repair.
The City of San Marcos ended the 2016/17 fiscal year with an estimated net surplus of $1.3 million and liquid reserves of $28.4 Million (42.4 percent of the budgeted expenditures). This surplus and the City’s overall reserves include a $5 million payment the Council approved in May toward paying down its pension obligation as well as an investment of $2 million toward meeting the city’s infrastructure needs, which is part of a policy that the Council approved in 2016 to dedicate a percent of the General Fund Budget toward infrastructure. In all, these results mean San Marcos remains on solid financial footing and able to make needed investments.
The $73.9 million 2017/18 General Fund budget adopted by the Council in June projects slight surpluses in the coming year. The revenue outlook for the city continues to improve. County Assessed Property Taxes are projected to increase about 4.3 percent, reflecting strong increases in property values in the city. The Creekside Marketplace will contribute about $5 million to the General Fund, which is a result of the city’s investment in the center to secure Winco and Hobby Lobby. One revenue trend worth watching is Sales Taxes, which are projected to be $16.7 million, slightly less than the previous year, as more purchases are made online and are local stores are seeing softening sales. Overall revenue will grow in 2017/2018 by approximately 5.95 percent.
City expenses will increase by approximately 5.99 percent in the coming year due to increasing costs for the city’s contract with the San Diego County Sheriff as well as contractual increases in healthcare and retirement obligations. Nearly 50 percent of the city budget goes toward public safety, including the Fire Department and the city’s contract with the County Sherriff. That contract, which is renegotiated every 3 to 5 years, will be renewed this year and increase about 6 percent. While the contract is a large part of the city budget, it is far more cost-effective for the city to contract with the County Sherriff than it would be to fund our own police department.
The budget for the coming year also includes a significant payment toward addressing the City’s infrastructure needs, committing more than $2.4 million to service our roads, buildings and other infrastructure and to purchase new fire fighting equipment. This payment is a positive step forward and a continuation of the Council’s policy of maintaining adequate funding the City’s infrastructure needs to ensure the strength of our roads, buildings and public safety equipment in the years to come.
Along with the annual operating budget, the Council also approved the City’s five-year $112 million capital improvement program for the construction and planning of new roads, bridges, parks and other infrastructure. This program, includes the following projects, such as finishing the Armorlite Drive “complete street,” building the Richmar park, grading the new Rancho Coronado park, median renovations and the rehabilitation of Rancho Sante Fe Road. With these projects the City is continuing to invest in new roads, parks and infrastructure.
This year’s balance budget represents another step forward in keeping San Marcos’ fiscal foundation strong.