THE LATEST: The city is facing the most serious financial challenges it has seen in more than a decade, but City Treasurer Pall Gudgeirsson and his staff have detailed a long-term financial plan they believe can head off a $21.2 million tumble in the city’s General Fund over the next five years. Gudgeirsson addressed City Council at a special meeting Tuesday night to address significant projected shortfalls in revenue based on the global economic collapse. Significantly, the city faces a severe reduction in revenues in the foreseeable future, thanks to decreasing income from property taxes, building permits and sales taxes. Roughly half of the city’s revenues historically come from property tax revenue.
While part of the presentation focused on the city’s revenues and operating costs, an important additional focus was placed on the city’s five capital projects: La Pata/Vista Hermosa Sports Park, the Civic Center, Senior Center/Downtown Fire Station, Recycled Water Expansion and Upper Chiquita Reservoir. All require additional funding beyond what is available and city finance staff walked the council through the various methods of funding each project.
Not included in the city’s projections are revenues from any of the three major projects in discussions or on hold: Marblehead Coastal retail or residential, new development at North Beach and the possible Target store.
Lastly, Gudgeirsson and City Manager George Scarborough outlined possible reductions to the city budget that would limit the city’s budget shortfall in five years to a cumulative $3.8 million. That number and the associated cuts to achieve such an improvement were characterized by Scarborough as “conservative and preliminary.” Among those possible reductions would be the elimination of three full-time positions each of the next five years, only adding one deputy in the next three years and a handful of operating reductions, including reduction of street and sidewalk maintenance.
WHAT’S NEXT: According to Gudgeirsson, the city is in good overall operating position given its sizeable reserves. San Clemente has the funding to maintain a high level of service and fulfill its obligations, but must look into the future to ensure that it has the capacity to deal with the very real economic pressures it is experiencing. Prior to presenting the city budget to council in May, he and Scarborough will meet with department heads to find additional savings. There also will be a series of public workshops.
“We’re in much better shape than most cities,” Scarborough said. “Through good fiscal management, good policy decisions and a little luck, we’re able to deal with these problems. We’re lucky we don’t have any car dealerships or luxury hotels.”
FIND OUT MORE: See Gudgeirsson’s guest column on page 12 of this week’s SC Times.
—Norb Garrett
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