CARLSBAD — The city is looking towards the next fiscal year and staff is positive about the status of Carlsbad’s budget.
“Carlsbad is doing better this year. Our revenue sources are rebounding. The city is financially stronger,” said the city’s Administrative Services Director Chuck McBride.
The City Council received a report on Tuesday on the operating budget for fiscal year 2015-16.
McBride said the budget will be balanced over the next 10 years.
The city plans to spend $314 million during the next fiscal year.
The largest portion goes towards the general fund, which funds city and emergency services, public work programs, parks and recreations and library services.
Capital Improvement Projects make up the next largest chunk, at $74 million. Those are one-time use funds that go towards major infrastructure projects, like the library update that is underway.
The city is spending $11.6 million to update the Dove and Georgina Cole libraries into flexible spaces fit for current and future needs. The funds came from a past fiscal year.
Construction will begin on the Georgina Cole Library in September.
Construction on the Dove Library will begin once the Cole Library is complete, likely in January.
Carlsbad’s revenue is going up.
The major revenue sources are driven by home prices, taxable sales and tourism.
Combined, they make up 80 percent of the general fund revenue.
McBride said home prices in Carlsbad are going up, although at a slower rate compared to the national average.
This year, home prices were up 2 percent from the same time last year. The previous year-over-year increase in 2014 was 10 percent.
“Although (home prices) are continuing to rise, they are tapering off,” McBride said.
Property taxes are also up 8 percent. They’re a relatively stable source of income for the city because of Proposition 13.
He said tourism is a “bright spot” for Carlsbad and he expects it to go up 6 percent for 2015-16.
Staff estimates Transient Occupancy Tax, which is charged per night/ per room, will bring in about $19 million in 2016.
Hotel occupancy has hit 70 percent and daily rates are going up.
The city’s general fund revenue was in the negative during the recession and it took a while to bounce back.
“It took us about seven years to get back to the level that we were before the recession,” McBride said. “We popped out of the recession in 2013 and our revenues have been relatively strong since.”
As part of city policy, staff aims to have 50 percent of the operating budget in reserves.
“We’ve exceeded that,” McBride told the council.
Sales tax in Carlsbad makes up a quarter of the revenue. The largest supplier of sales tax in Carlsbad comes from car sales in the Car Country Mall east of Interstate 5.
Car sales tax hit an all-time high in 2014 and brought Carlsbad about $6.5 million.
That is more than the Carlsbad Premium Outlets, Carlsbad Village, Plaza Camino Real and The Forum Carlsbad’s combined sales tax.
The unemployment rate in the city is also rebounding.
Carlsbad’s unemployment rate matches San Diego’s at 5.1 percent. It’s lower than the state and national average of 6.5 and 5.5 percent respectively.
The city is also looking to add about 16 full-time positions and eliminate nearly 12 positions that are currently vacant.
“We are taking a look at our current and future needs and making sure we have the right staffing in place to provide services in the most efficient way possible,” said Helga Stover, the city’s budget manager. “In recent years, departments have reorganized, including looking at what services should be provided by staff and which should be contracted out.”
The final hearing for the city’s budget is June 23 at City Hall at 6 p.m. The public will have a chance to comment then.
