Costa Mesa’s latest budget appears ‘healthy’

Lolita Harper

COSTA MESA -- The city manager declared a “healthy” financial outlook

for the upcoming year in his annual budget message this week and credited

the city’s strong vital signs to exceptional growth in revenue from

retail establishments.

Allan Roeder presented the council with the $101.8-million proposed

budget for the 2002-03 fiscal year and said the report was intended to

begin discussion. Council members will begin public budget discussions at

a June 10 study session.

The 2002-03 budget presents a $7.2-million increase -- or 7.64% --

over its 2001-02 budget. No programs are scheduled to be cut in the next

fiscal year -- which will begin July 1 -- and the city has even added a

few more employment positions. Despite the national economic downturn,

Costa Mesa continues to thrive because of its large retail revenue base.

The boom in retail establishments over the last 30 years has allowed

city coffers to consistently increase, the report states. The 2002-03

budget assumes the same growth, showing $1.9 million more in anticipated

sales and use tax than the previous year.

Sales and use tax is the single largest revenue source for the city --

estimated at $36 million in 2002-03 -- but with Costa Mesa rapidly

reaching its building capacity, Roeder cautioned against depending on

such dramatic returns in the future.

City officials foresee a 3% increase in property taxes -- from $13.4

million in 2001-02 to $13.8 million in 2002-03 -- and tourist-driven

revenues are expected to go up 5.8%.

Roeder said the city is in good shape as far as expenditures are

concerned. The budget calls for a number of capital improvement projects

as a high priority, especially for the Westside. The city is expected to

spend 0.83% more in capital improvement projects in the next year, for a

total of $2.3 million.

“All of that is being accomplished -- for about the 20th year in a row

-- without any new taxes or increase in taxes,” Roeder said.

But the report does warn of an apparent trend of increased spending.

In the past two years, funds designated for services such as public

safety, street maintenance, code enforcement and recreation programs have

exceeded budget allocations.

“The city cannot continue along this path without expecting to

increase taxes and fees, implement new taxes or approve new development

in excess of what is provided for in the current general plan,” Roeder’s

budget message shows.

Costa Mesa is expected to shell out more money this year for

liability, building and personal property insurance because of the

industrywide increase after Sept. 11.

Roeder also acknowledges the likelihood of state legislators raiding

local funds to pad California’s estimated $20-billion deficit, but he did

not accommodate for that in the budget. It is impossible to estimate the

magnitude of potential losses, Roeder said, and would take away from

residents.

“If we go into the budget and cut back programs and services, then we

are basically cutting from a local level and letting the state off the

hook, and people will think it’s their local City Council that has

misplaced priorities,” Roeder said. “Local officials work their tails off

to really manage their local resources. People need to know that any cuts

are the result of the [state] Legislature and the governor.”

In the event of a major raid on local funds, Costa Mesa has $14.1

million in reserves.

City staffers worked harder this year to produce the report a month

earlier than it is traditionally released, Roeder said.

“We’ve moved distribution of the budget ahead to really allow people

to mark it up, develop questions and really spend time with it so they

don’t feel rushed into making decisions,” Roeder said.

In addition to the June study session, two or three public budget

workshops will be scheduled. The City Council will hold a budget hearing

June 17, and the budget must be adopted by July 1.

FYI

Copies of the Costa Mesa 2002-03 fiscal year budget are available in

the city clerk’s office at 77 Fair Drive or online at o7

www.ci.costa-mesa.ca.usf7 . Copies are also available at Costa Mesa

branch libraries.

* Lolita Harper covers Costa Mesa. She may be reached at (949)

574-4275 or by e-mail at o7 lolita.harper@latimes.comf7 .