OCEANSIDE — City Council put off approving proposed budget polices revisions on Oct. 12 and set a workshop date to look at the changes that will put tighter reins on allotment of funds before a $2.5 million shortfall hits in June.
Councilman Gary Felien spoke in support of the revised polices that are based on what he called “honest accounting” of items as they occur without waiting years to realize expenses, such as city employee accrued vacation pay.
Among other things, the proposed budget policies revisions ask that post employment benefits be set aside in advance instead of the current pay as you go method.
“Post employment benefits are currently funded as pay as you go and it has worked,” City Manager Peter Weiss said. “They’re asking citizens to allow the city to downsize to get through tough times in a fiscally responsible manner.”
Although excess in general fund revenues is not expected for three to five years, proposed policy changes determine where surplus goes.
Under the revised policies any surplus in revenues is pre-designated to a neat 35 percent to the unassigned fund balance, 35 percent to reduce long term unfunded liabilities, and 30 percent to enhance new programs, employee salaries and benefits.
The suggested 35-35-30 division of excess funds to the unassigned fund balance, unfunded liabilities, and new programs hits midway between some council members thinking that there should be no predesignation of excess funds and others wanting excess funds to be split between reserves and paying down debt.
In the meantime the city is anticipating a $2.5 million shortfall when it looks at the fiscal budget in June. Reduced services, city layoffs or both are inevitable.
“We will have a $2.5 million problem next year,” Weiss said. “Something has to be cut. The point is we can no longer afford all this stuff. We can’t keep paying for it anymore.”
The push for the revisions is to promote stability and give the city a more favorable bond rating.
Building a healthy city reserve fund, a future development fund and an economic reserve fund is also part of the proposed policies.
Some saw the proposed revisions as too restricting. “I don’t think we should tie our hands,” Councilwoman Esther Sanchez said.
A decision will not be made until after the Nov. 8 workshop.
At the same meeting city council took action to stop the city requirement that developers give enhanced notification of building projects in a 3-2 vote in which Mayor Jim Wood and Sanchez voted no. Notification within 300 feet of a building site will be mailed, but notice beyond 300 feet will now be limited to online posts on the city website and email notice upon request.
Some saw the previously required 1,500 feet notification as unnecessary. “It’s very cumbersome,” Councilman Jerry Kern said. “The sign (posted on the building site) will still be there.”
Others called the decision to limit notification from 1,500 feet to the state required 300 feet another perk for builders who foot the bill for public notification.
“The community should know what we’re doing,” Sanchez said. “You’re calling it streamlining the process, but you’re leaving out the community.”
Wood voiced concern that the decision to limit the area of notification will generate last minute objections to building projects after money has already been spent on them.