PALMDALE — The City Council on Tuesday unanimously approved a $335.1 million budget for the fiscal year beginning July 1.
The $335.1 million includes all the city’s budgetary entities, including capital projects, special funds and debt agencies.
As it was developed over the past six months, the budget focused on priorities including public safety, economic development, completion of existing parks, parks safety and maintenance of existing facilities, Finance Director Karen Johnston said.
The portions of the overall budget most visible to residents are the General Fund operating and capital improvement budgets.
The city’s General Fund operating budget, which covers the day-to-day activities, is proposed at $82.3 million in expenses, with $82.7 million in revenues, primarily from property, sales and other taxes.
“We’re actually well-diversified in our tax base,” City Manager James Purtee said.
The biggest area of expenses for the city’s operating budget is law enforcement, at 31.9% of the total, followed by public works at 19.8% and recreation and culture at 12.1%.
The budget calls for adding six new full-time positions to city staff, bringing it to a total of 219. This is still a significant decrease from the highest staffing levels of 355 full-time positions in 2007-2008, before the economic downturn which led to layoffs, officials said. The city added 15 full-time positions last year and 12 the year prior.
The budget includes a 2% cost of living increase to salaries across the board, and makes adjustments for mandated minimum wage increases, Director of Administrative Services Anne Ambrose said.
The largest single area of spending is in the capital improvements budget, at $146.8 million. Of that, nearly 90% is set aside for various roads projects.
This includes a number of major projects this year, including reconstruction of more than three miles of Pearblossom Highway, from 55th Street East to approximately 25th Street East; widening two segments of Rancho Vista Boulevard to maintain a constant width; and improvements to the Antelope Valley Freeway and Palmdale Boulevard interchanges.
Many of these projects involve combining multiple sources of funds to cover the total costs. The public works staff aggressively seeks out grants for projects, which may be combined with other sources to fulfill a
The 2019-2020 budget includes a reserve fund of 30%, the upper limit goal for the city in maintaining funds against economic downturns and emergency needs. This represents about three months of city spending, Johnston said.
However, with revenue forecasts for future years, that reserve is expected to be used to balance the budget as the increases in expenses outpace revenue growth. The General Fund revenues are increasing at a rate of about 3% annually, while expenses are growing at about 4.5%,
“We need to keep that in mind as we move forward with these budgets,”
To address this growing discrepancy, the budget approved Tuesday includes a framework for seeking various means of increasing revenues to be considered by the Council during the coming year. Adopted in concept as part of the budget, this framework does not commit the Council to any changes in fees or adoption of any tax,
More than half the anticipated expense increases are beyond the control of city staff, Purtee said, including the city’s public safety contract and the state employee pension formula changes. This makes it difficult to meet the challenge of balancing budgets by cutting
Among the revenue measures that are being developed are a comprehensive citywide fee study and looking at means of monetizing the city’s fiber and
The city will review its transient occupancy tax — sometimes called a bed tax and charged to hotel guests — to fund a potential joint marketing program for the Antelope Valley, which would include both the cities of Palmdale
Funding has been set aside for polling services to determine the viability of two potential tax measures: an education parcel tax to fund and expanded library and museum operations and a sales tax to fund public safety, which is the fastest growing area of the city’s budget, Purtee said.
The city’s landscape maintenance districts will be studied to find those that are underperforming for possible assessment fee changes through the Proposition 218 process.
In a similar vein, the city and parks maintenance budget for 2019-2020 will be reduced by $400,000, thanks to a renegotiated contract by the public works department. This savings will be added to the General Fund reserve to help balance next year’s budget, which is currently estimated to have a $726,000 deficit.