South Pasadena City Council members heard a long-range budget forecast that is expected to show increased deficits during the next five years.
The presentation by consultant Frank Catania, a principal management analyst, and City Manager Stephanie DeWolfe, took place in a study session during the March 6 regular City Council meeting.
The meeting was the first public presentation of the budget forecast before it is delivered in special community forums in March. During those forums, residents will be asked to provide input on potential options to close the anticipated budget gap, said Stephanie DeWolfe.
No decisions were made as part of Wednesday’s meeting. City staff will return to council with recommendations based on the input received during the public outreach. The focus, DeWolfe stressed, will be on long-range financial health.
“Our goal is not just to balance the next budget or two, but to consider the long-term financial sustainability of the City,” DeWolfe said. “We want to create a sustainable system for decades to come.”
The City of South Pasadena has historically managed its budgets conservatively and recently met its mid-term expectations. The projected budget increases are driven by two primary factors, DeWolfe said – strategic investment in city infrastructure, and increased costs of pension obligations.
In recent years the city has increased spending on street repairs and water infrastructure, including the replacement of three crumbling reservoirs. City staff has identified nearly $100 million in critical infrastructure spending needs, with funding identified for just half of the projects.
In addition, the payments that the city makes to CalPERS, the state’s public employee pension system, are set to increase in coming years.
By finding solutions now, DeWolfe said, South Pasadena has time to develop revenue sources to close the budget gap over the next several years.
The city could be looking at cutting costs by:
- Reducing service hours or eliminating city programs.
Increasing revenue by:
- Establishing new fees, including the installation of parking meters.
- Opening a Cannabis store and benefiting from the associated taxes.
- Encouraging investment in business districts that generate property and sales taxes.
- Increasing the local sales tax.
- Redeveloping city properties in a manner that generates more revenue.
“By addressing the budget issues proactively, we can begin to create new revenue streams,” DeWolfe said. “Throughout March we will present options to the community and ask residents to help us prioritize.”
The community budget workshops are scheduled for:
- Wednesday, March 13, 2019 at 7 p.m. at the Library Community Room, 1115 El Centro St.
- Sunday, March 24, 2019 at 2 p.m. at the South Pasadena Senior Center, 1102 Oxley St.