SOLANA BEACH — The City of Solana Beach finished FY 2020 in the black, having shaved about 5% off last year’s budget in anticipation of lost revenues due to COVID.
At the end of May, a month before the fiscal year ended, the Solana Beach City Council reduced its General Fund revenue budget by over $1 million, down to $19.2 million. But actual end-of-year revenues weighed in at $19.9 million, yielding a surplus just over $700,000, according to unaudited figures presented at the Council’s Wednesday meeting.
Of that positive balance, the Council voted unanimously to use up to $380,000 to subsidize a multi-year cumulative revenue shortfall in the city’s Junior Lifeguard and summer camp programs. Councilmembers put another $250,000 toward an unfunded pension balance.
“When we were confronted with the pandemic in early March of this year, we had to do a lot of belt-tightening,” City Manager Greg Wade said. “Every department director was given the task of making sure that we managed our expenses for the rest of the fiscal year and we’re still continuing to do that.”
The good news is tempered by the fact that more than a third of the city’s revenue surplus owes to businesses not taking the governor up on his offer to defer sales tax. The city estimated businesses would defer $254,000 into FY 2021, which began July 1.
As it turns out, businesses deferred only about $34,000. Having realized the difference last year, the city must amend its current budget to make up for $221,000 of lost revenue this year.
“It’s something we’ve got to keep a close eye on. We’re not out of the woods by any stretch,” Wade said. “This is the fiscal year that, from the get-go, we’ve been impacted by the pandemic and other economic challenges. So that will be something we will have to reconcile as we go through the mid-year budget adjustments.”