Halfway through the fiscal year, the city of San Diego’s finance team takes a closer look at its budget to reevaluate projections and establish whether the budget is still an accurate portrayal of the city’s finances.
This year’s mid-year report is especially significant given two major events that have affected the city’s budget projections in the last year: the La Jolla landslide and the October wildfires.
The report projects that by the end of fiscal year 2008, the city will have spent about $21.6 million more than it raised through revenue. That’s largely as a result of the two major disasters, the report states, which should drain the city’s day-to-day budget of $44.9 million.
That report came out last week. Yesterday, the city’s Independent Budget Analyst’s Office took a close look at the mid-year report and, in turn, issued its analysis. Here are the highlights:
- The IBA points out that, because of a two-month time period needed for analysis and report writing, the city’s budget report is only based on data from the first four and a half months of the fiscal year. It suggests bringing the report out later in the year (a council policy currently mandates that the forecast report has to be released by the third week in January) so that a full six months’ worth of data can be analyzed for the report.
- The IBA has concerns with the city’s Storm Water Pollution Prevention Administration, which only spent 56.6 percent of its budget last year. According to the report, “It is unlikely that they will be able to spend all current and prior year monies by year-end.” The IBA report suggests spending that extra money elsewhere on more pressing needs.
- The report says the amounts projected for spending on the wildfire and landslide disasters by the end of the fiscal year are unclear. The IBA wants city staff to come up with another report before the end of the fiscal year that includes more information on the disasters and how the city plans to pay for the cleanups.
- The IBA points out that property transfer tax is predicted in the city’s mid year report to increase by almost $2 million. The report is skeptical about that. It says: “As housing prices and sales have continued to fall throughout the calendar year 2007, the cause of this rebound is unclear.”
The mayor’s budget report will be considered by the City Council’s Budget Committee today. The IBA’s office is recommending that the City Council hold off on approving the budget update until the issues raised in its analysis have been dealt with.