VISTA — Over the past several years, the city has clawed its way out of the red and into the black with its annual operating budget.
During its May 25 meeting, the Vista City Council saw the draft operating budgets for Fiscal Years 2021-22 and 2022-23 and was met with surpluses totaling more than $800,000, according to Sara Taylor, Vista’s budget manager.
The FY 2021-22 operating budget is estimated at $161.9 million with General Fund revenues projected at $94.8 million and General Fund expenditures are estimated at $94.2 million giving the city a modest surplus of $657,505.
For the 2022-23 cycle, Taylor said the city expects an increase of nearly $3 million for General Fund revenues as staff projects a budget of $97.2 million in revenues. Expenditures are increasing at scale with revenues as staff is estimating a budget of $96.9 million leaving the city with a surplus of $274,616.
However, staff capped medicinal marijuana tax revenue estimates at $4 million for each of the next two fiscal years. Councilman Joe Green said during an earlier agenda item the cannabis tax is likely to be around $5.2 million each year, thus giving the city an additional $2.4 million combined in surplus funds.
“While the amount collected is estimated to exceed $5 million, there is still uncertainty at what level this revenue will stabilize due to potential approval of medical and adult-use (recreational) cannabis in other jurisdictions,” Taylor explained. “The city has provided a potential use for these funds.”
By comparison, the 2020-21 budget came in at $77.4 million due to the impacts of the COVID-19 pandemic on the city’s sales, transient occupancy and Proposition L taxes, to name a few. As such, Taylor said the city will receive more than $26 million in state and federal funds for COVID-19 recovery efforts.
However, the $26 million is not included in the draft budget as staff will return to the council to discuss a spending plan in line with the council’s goals and to make sure how the money can be spent under the American Rescue Plan Act guidelines.
“Oftentimes when we buy new things, they come with additional responsibilities and obligations,” Councilman John Franklin said, cautioning the council about the windfall. “There are maintenance costs we didn’t expect, replacement parts we didn’t expect. Just want to make sure we come out of it better than when we went into it.”
Tax revenue is estimated to increase compared to 2020-21 as economic recovery from the pandemic is underway. For example, tax revenues in 2020-21 came in at about $59 million, while Taylor said the city is projecting a $7.3 million increase in 2021-22 and a $2.3 million increase in 2022-23 from this year.
Taylor said the city is projecting sales tax revenue of $24.9 million and $25.7 million for the two years, while property tax is pegged between $26.7 million and $27.5 million. The city’s largest revenue generator, though, is sewer fees, which are estimated at $31.2 million and $33.6 million.
As for expenses, public safety has the largest budget coming in at $55.5 million in 2021-22 and $57.1 million in 2022-23. There are slight increases over the two years for general government, community development, public works and community services, according to the staff report.
The city is projecting spending $27.2 million and $28.5 million for its law enforcement contract with the San Diego County Sheriff’s Department, and $28.2 and $28.5 million for the Vista Fire Department.