For now, Encinitas’ government functions within a fiscal comfort zone, based on the next two years’ budgets approved by the City Council on Wednesday, June 12.
Council members voted 5-0 to pass a spending plan covering July 1 of this year through June 30, 2021.
The plan anticipates the city in the 2019-20 fiscal year will receive $77.3 million in revenue supporting its general fund. The pot of money supports daily operations such as public safety and administrative services.
That revenue would be $2.2 million more than collected this year from various sources, including sales and property taxes.
City financial analysts project general fund spending for the coming year to be $69.5 million, about $7.8 million less than revenue.
In 2020-21, according to the council-approved plan, the city would collect $79.8 million in revenue, while spending $71.9 million, a $7.9 million difference.
The general fund forms the biggest chunk of the city’s total budget. The next largest slice is the capital improvement program, which funds public works construction and other projects.
The latter spending plan encompasses $62.4 million over the next six years, including $9.5 million for 2019–20.
The major piece in the near future is for the Leucadia Highway 101 Streetscape Project, which will overhaul traffic patterns, landscaping and parking on the historic thoroughfare through northern Encinitas.
Council members did not discuss the big picture financial outlook, but did question a couple of issues, especially an allocation for the revision of the city’s controversial plan to accommodate state affordable housing mandates.
“When we’ve been talking to (other cities’ representatives) and I say it costs us a million dollars for the housing element, people are aghast, like ‘How is that possible and why is that?” Mayor Catherine Blakespear said.
Development Services Director Brenda Wisneski responded that the allocation is a worst-case estimate of the maximum cost. The reason for the high price tag, she said, is that the city, after years of delay and noncompliance, only recently submitted a housing plan to the state.
The submission resulted from a court order after the city’s voters vetoed a proposed housing plan attempting to meet state requirements. The court order overrode the election result and required the city to submit a document complying with state law.
The plan, which is intended to cover an eight–year-cycle that ends in mid-2021, was accepted only weeks ago by state housing officials and remains subject to their review as well as pending litigation in this county.
In the near future, the city must revise the recently submitted plan to meet the state’s 2021-29 cycle for housing plans or face repercussions.