Because of one-time expenses, the city of Calimesa is expected to have a small deficit in the next fiscal year that it will cover by using reserve funds, it was discussed at a budget workshop last week.
Calimesa is projected to have a $14.6 million operating budget and bring in about $14.6 million in revenue, said City Manager Bonnie Johnson, who presented the budget at the May 24 public workshop.
“That is going to be a pretty even budget there as far as your revenues and expenses, and that is a look at things city-wide,” she said.
The $98,066 projected deficit stems from one-time expenses for a housing element update, riding lawn mower and new flooring at city hall and the planning department, Johnson said.
“If we took out the one-time expenditures that are proposed in this budget, not the ongoing expenditures, but the one-time, which was $195,500 and those were the housing element update, the riding lawn mower and new flooring at city hall and planning, if you take those out, we actually have excess revenue over expenditures of $97,434,” Johnson said.
Johnson said it was appropriate to use reserves to pay for one-time expenses, but she would not recommend it for ongoing expenditures.
The city’s general fund, its biggest operating fund, was the main focus of the workshop.
“The majority of what we are going to talk about today is the general fund and then some other key funds throughout the city where most of the city’s business is conducted,” Johnson said, adding those other funds include operations and capital improvement.
Calimesa’s general fund revenue for the upcoming fiscal year is projected to be $8,031,356, with its expenditures at about $8.1 million, with 60% going to police and fire services.
“Is that fairly typical for a city our size?” Councilwoman Wendy Hewitt asked Johnson about such a large percentage allocated to police and fire services.
“It is. It could be more,” Johnson said, noting it was a slightly higher percentage before Calimesa started its own fire department at the start of 2018.
Even though Calimesa will be tapping into its reserves, the general fund is expected to maintain a balance reserve of about $6 million or 74% of proposed expenditures on June 30, 2022. The city’s policy is to maintain a balance reserve of 35%.
After putting aside 35% in reserve, plus setting up a reserve for employee banked hours in case of departure, Calimesa has a projected unreserved fund balance of about $3 million, or 37%.
Following recommendation, council directed staff to update the budget with a $1 million allocation for the Pavement Management Program, which projects $7.3 million in expenditures to repair and maintain city-wide streets.
Johnson said the $1 million would kick off the program, while the city seeks other funding.
“This at least gets us started,” she said, pointing out the city would still have a reasonable level of reserves.
“I am comfortable with allocating $1 million,” Councilman Jeff Cervantez said before adding he would like some flexibility to use more funds if needed.
Johnson said specific projects in the Pavement Management Program would be brought back to council and discussed at the June 21 meeting, after the budget is brought to council for approval.
For more information, visit cityofcalimesa.net