SAN MARCOS – The San Marcos City Council gave final approval on June 8 to the city’s fiscal year 2021/2022 budget, which addressed a nearly $2.7 million deficit. The city is also expected to receive $18.2 million in new COVID-relief money.
San Marcos will soon receive funds from the federal government’s American Rescue Plan Act (ARPA).
“Under the legislation that was enacted was a provision that allows cities that can demonstrate that the pandemic caused a loss of general revenues, to use those funds to make up for such losses,” said the staff report.
In the meantime, the city used its reserves to cover the $2.7 million deficit.
“In the current economic issues related to the pandemic, the drop in rental revenue is the primary cause for the deficit situation we are experiencing,” the staff report said. “Rental revenue accounts for 9% of General Fund revenue, down from the 12.5% that we projected in adopting the FY 2019-20 budget.”
Despite having to dip into the reserves, however, the city ended $6.7 million above the minimum reserve level.
Those excess reserve funds will be used to reimburse city employees for their 10% wage reduction ($1 million), dedicate funds to the three internal infrastructure funds ($4.7 million) and replace $1 million removed from the General Plan Update project.
The budget shows a law enforcement budget of $22,737,062, an almost $1 million increase from last year. It also includes a nearly $3 million increase in development services from last year and a $600,000 increase in parks and recreation from last year.
The council also approved the budget for the city’s Capital Improvement Projects, which comes to $6.7 million for Fiscal Year 2021-22.
According to the report, the bulk of the $6.7 million is the $4.4 million appropriated for various street projects. Half of that is for the future reconstruction of San Marcos Boulevard from Grand Avenue to Rancho Santa Fe.
Additional street/traffic projects make up another $1.9 million of the total FY 2021-22 CIP appropriation.
“The City’s finances remain in a strong condition despite the challenges posed by the pandemic,” City Manager Jack Griffin said. “Despite the significant effect the pandemic has had on our revenues and the need to adopt deficit budgets for the past two years, through generation of alternate revenue sources, significant belt-tightening on normal expenditures and the assistance of our entire workforce in agreeing to personnel cost reductions, we are emerging from the pandemic on solid financial ground.”