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Despite looming challenges, San Marcos’ ‘economic engine’ running

SAN MARCOS — San Marcos has a balanced budget, strong reserves and still provides the core services that keep and attract young families, but hurdles are on the horizon, Mayor Jim Desmond said Tuesday in his state of the city address.

Likening the city and its economy to a car engine, Desmond said that it would take the efforts of the city and its partners in public and private education, the business community and other stakeholders to “keep the economic engine running.”

“It’s up to everyone in this room to keep that economic engine running,” Desmond said. “My job and your job is to make sure providing housing, and the infrastructure, and the amenities, the roads, the hotels, restaurants and things like that. We have to keep that engine lubricated, oiled, keep it greased up so that it keeps running smooth.”

Desmond, who is in his final term as mayor, said that the city does face challenges to that economic engine, listing two specifically: changes to state law that have led to non-violent offenders being released early or serving sentences in county jails as opposed to state prisons, and the city’s ballooning pension obligations.

As for the former, Desmond said that the Sheriff’s Department — which contracts with the city for services — has worked to alleviate the impact that the released offenders — some of whom wind up homeless — have on the community.

San Marcos saw a 22 percent decline in reported crimes, Desmond said, citing a SANDAG report.

“Our sheriff’s need a hand for that,” he said.

The other obstacle the city faces, Desmond said, is a looming increase to the city’s obligations toward employee retiree benefits. Those obligations are expected to rise a modest 4.5 percent next year, but by 2022 could rise as high as 42 percent up from $6 million to $10 million — according to current projections.

In response to calls by some for the city to convert the city’s pension program to a defined-contribution plan, such as a 401(K), Desmond said that the buyout of pensions necessary to make the switch would “bankrupt the city today.”

The council met in December to “get a grasp” on its obligations, and staff is expected to return in March with recommendations on how the city can prepare for the increase, Desmond said.

Desmond’s speech was not all about challenges, as he pointed out many of the city’s accomplishments over the past year, including a balanced $71 million general fund budget, a robust road maintenance program, several major infrastructure projects — including two bridges over flood-prone San Marcos Creek — and a developer-led housing boom that has created various housing types.

These accomplishments, Desmond said, are all products of the city’s commitment to three priority areas — public safety, management of resources and quality of life.

The city saw 15 major projects start or near completion in 2016, including The Marc, the large apartment-centered development near Palomar College, the North City District adjacent to Cal State San Marcos, a Fairfield Inn and Suites under construction on the corner of Twin Oaks Valley Road and San Marcos Boulevard, and the first projects within the Creek District, two mixed-used developments.

A major change regarding development that Desmond pointed out was the “recalibration” of the Creek District plans, which started late last year when city officials acknowledged the old plan — approved in 2007 — included too much retail space and needed an overhaul.

The city, Desmond said, has revived and expanded the Creek District oversight committee in an effort to capture more public input on the future of the plan.

Desmond gave his speech in front of more than 300 guests at Cal State San Marcos’ student union as part of a joint event with the San Marcos Chamber of Commerce.

The chamber celebrated its annual officer installation and gave awards to several businesses of the year and an ambassador of the year.