More revealed about cuts

Despite taking steps to balance the budget, Costa Mesa is still falling short.

A midyear report of the city’s budget reveals that the city is short by $9.3 million. An earlier estimate by the city’s finance department predicted that Costa Mesa would have been short by $4.6 million, which the city could have covered by dipping into its reserve.

The City Council will receive the report during a study session at 4 p.m. today at City Hall, 77 Fair Drive.

Costa Mesa’s two largest sources of revenues — sales tax and transient occupancy tax — are down compared with previous years.

“It’s really due to the economy,” said Bobby Young, Costa Mesa’s budget and research officer. “We don’t have people buying as much. Therefore our sales tax are down, and our hotels don’t have as many people staying in them compared to the previous years.”

Ideas on how more cuts can be made will be presented to the council today, Young said.

Earlier last year, and in an attempt to balance the 2009-10 budget, the council approved a 10-point plan, including an early retirement program, which saved the city about $2.5 million, and slashing each department’s operating costs by 10%, which saved the city about $13.4 million.

In all, the plan is estimated to save the city $22 million, though an earlier estimate predicted that Costa Mesa would save $20 million, according to the budget report.

The city’s sales tax from the first six months of this fiscal year show a continued decline. Costa Mesa is down by 21% when comparing its revenues with what it made during the first two quarters of 2008.

The city’s transient sales tax is also down by 28% from the first two quarters two years ago.

The city’s revenues are down almost $13 million compared with revenue recorded in 2008, Young said.