For First Time Since 2007, City Projects Surplus in FY2014
In a study session this past Tuesday at City Council, a three-year fiscal outlook was presented which shows that the City could possibly eliminate its deficit come Fiscal Year 2014.
Following the $134 million in reductions to the general fund that have occurred along with the elimination of some 786 budgeted positions since 2007, the word “surplus” becomes mightily enticing. According to the presentation, FY2014 will see a $3.6 million surplus that the City hopes to apply to the notably smaller-than-ever projected deficits in FY15 and FY16. These moves “would nearly wipe out the structural deficit” by FY2016 according to Tom Modica, Director of Government Affairs and Strategic Initiatives for the City of Long Beach.
Furthermore, FY14 will bring at least $37.5 million in one-time revenues, with $25 million of that coming from Redevelopment Agency-oriented funds (fire sales of property, property taxes, et cetera), $2.5 million from IAM pension savings, $4.4 million in unspent Upland Oil funds, and $5 million from FY11 transfers.
FY14 will also bring in $10.7 million in new ongoing revenue to the General Fund which can fund services, opposed to one-time monies. This amount is expected to grow marginally in FY15 by $500,000 and $1.8 million in FY16.
Though the economy is still “fragile” according to the report, it highlighted that the austerity decisions Council has made have ultimately paid off and will continue to do so if the city “[stays] the course to maintain structural balance.”
Even more welcoming, while there won’t necessarily be new hires, there will also be no formal cuts in the forseeable future.
“Yes, no proportionate share cuts will occur next year,” Modica explained, “but there may have to be some targeted reductions in other funds or operations that are experiencing difficulties. Sequestration is a good example: it may affect other areas that would have to take reductions that are not in the General Fund.”
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City of Long Beach: FY 14-16 Fiscal Outlook: Challenges & Direction
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