The City of Escondido's Annual Operating budget is one of most important tools in providing a City that is safe, clean, and run efficiently. The Operating Budget projects short-term revenue and expenditures related to providing day-to-day services. A separate capital improvement budget projects long-term revenue and expenditures for major projects such as roads, park improvements, and pipelines.
The budget process begins around December each year; the City Manager and Finance staff meet to develop the assumptions, guidelines, and schedules to be used in the preparation of the operating budget. The Finance Department provides a budget newsletter to each department, which includes information such as:
The City’s current fiscal situation: Current revenue constraints and economic or community conditions
Council priorities for the upcoming year
Changes affecting the cost of employee wages and benefits
Instructions and due dates for completing budget submissions
The City’s operating budget provides a plan for how the monies coming into the City (revenues) will be spent in order to operate and maintain City functions and services, such as police, fire, parks, and libraries. Core City services funded through the General Fund’s budget are supported by a variety of revenue sources. The four major General Fund revenues are sales tax, property tax, transient occupancy tax, and franchise fees and account for 78% of the General Fund’s revenue.
The City spends 66% of its General Fund departmental budget on public safety, and the remaining on services such as parks, libraries, public works, and general government services. City services require people to provide them, and as a result 84% of the City’s costs are personnel costs.
A budgetary forecast is prepared in December for the next fiscal year that runs from July 1 through June 30. This forecast projects revenue and expenditure for the General Fund in the upcoming fiscal year. In spite of many positive economic developments, federal aid packages, and a robust vaccine rollout in recent months, COVID 19 negatively impacted revenue. Plus, an already difficult structural budget gap, and increasing pressure for City services, especially in traffic safety and homelessness worsens the problem. The City again faces a deficit, anticipated at $8 million.
Staff has recommended that the City Council approve the use of the one-time source of funds from the Successor Agency Redevelopment Loan repayment and funds from the Section 115 Pension Trust Fund. Additionally, the American Rescue Plan will provide funds to ease the economic impacts from the COVID-19 pandemic. It is important to remember that these are one-time sources of money and don’t solve the longer-term problem.
According to the most current Office of Traffic Safety data, in a category of 59 California cities of similar size, Escondido ranks 9th for fatal and injury crashes. The proposed budget includes a strategy to improve traffic flow and safety throughout the City by providing the resources to improve the City’s infrastructure, operate a responsive transportation system and address transportation safety.
Homelessness is a national, statewide, regional, and local challenge. The City recently created and reviewed a “Strategy for Addressing Homelessness” with the City Council to articulate and implement the best approaches for addressing community impacts while being sensitive to the importance of tackling underlying causes and helping people; however, the current staffing does not meet the City’s needs to carry out the strategy and meet the demand for service. The proposed budget provides the additional resources necessary to address this issue.
In the short term, the current budget recovers from COVID and addresses two significant public issues, traffic safety and homelessness. In the long run, staff continues to recommend that the community consider a revenue measure to put Escondido’s finances on a sound footing on a permanent basis.