CALEXICO — Halfway through what Calexico officials have so far described as a period of financial recovery, it is already projected the city is headed toward a $900,000 general-fund surplus, according to a second-quarter budget report.
Rebounding from a $4-million general-fund deficit several years ago, when the books close on fiscal 2019-20 on June 30 city officials said the year is expected to see the first positive general-fund balance since 2014. The budget report was prepared by Finance Director Karla Lobatos and presented to the Calexico City Council at its Jan. 22 special meeting.
“That is very good news,”
several council members could be heard saying during Lobatos’ presentation.
“I’m very appreciative of
all our quarterly updates because that keeps our eye on the ball, and it keeps
us focused on our expenses,” Calexico City Council Member Lewis Pacheco said
after Lobatos led the council through the budget.
“As you might recall, for
a year or more the council did not receive any updates about the budget,”
Calexico City Manager David Dale told the council. “That was one of the reasons
why I think we got into trouble. Now, we’ve got a great finance director who’s
given us updates every quarter.”
The positive projection
comes just weeks after Dale said the city was predicting to end the fiscal year
with a $755,000 surplus despite scaled-back projections for revenues from both
cannabis-business fees and taxes and ambulance-billing fees, according to
It wasn’t known by
deadline what the council intended to do with any surplus. However, in mid-December
Mayor Bill Hodge called for city staff to begin the process of looking into a
wage increase for all city workers after a dozen years with no pay hikes. Many
bargaining units over the last three years took wage and benefit reductions to
help the city overcome previous deficits.
Dale said in December he wanted
to wait until the second-quarter report was made available so city finance
staff could create scenarios for the cost of two- and five-percent wage increases.
No talk of a wage
increase proposal occurred during or after Lobatos’ presentation.
Work on the next fiscal
budget in the form of budget workshops is expected to begin sometime in February, Assistant City
Manager Miguel Figueroa told the council. This will allow time to set
priorities for expenditures, he added.
As part of the Finance
Department’s presentation, Dale and Lobatos also asked the council to amend the
2019-20 budget to include two new positions for human resources and community
service technicians. The proposal was approved unanimously.
With 144 employees, Calexico
has some its lowest staffing in a decade.
started off her presentation by updating the final general-fund balance from
fiscal 2018-19, which ended June 30, 2019. Additional revenues were found and
the “net ending working capital” for the general fund was about $1.1 million,
However, those funds did
not lead to a surplus last year due to $1.5 million the city had to pay back to
its wastewater enterprise fund. The city had borrowed from the fund to make up
for earlier deficits.
For fiscal 2019-20, which
ends June 30, the city is projected to have a balance of $903,000, she said.
That includes a projected five-percent operating reserve, Lobatos added.
Rebuilding reserves has
been of big concern to Dale, who said during a December interview simply ending
with a positive general-fund balance is not enough, and that the city must look
to rebuild its so-called rainy-day fund.
Although revenue is
projected to be down in some significant areas, overall revenues are expected
to increase by $83,000 due to offsetting increases in several areas, Lobatos
told the council.
Projections for cannabis
revenue were reduced by $100,000 and ambulance-fee billings were scaled back by
$50,000, she said. However, there were increases in property taxes ($66,000), a
land sale by the city ($40,000), an increase in the trash-contract franchise
fee ($35,000) and other areas that surpassed any losses.
The city also saved $243,000
from vacant positions and $99,000 in retiree medical costs, Lobatos reported.
Additional information on
why the cannabis and ambulance billings had to be revised wasn’t immediately
available. However, no retail cannabis shops have yet to open in the city, and
Dale said the fire and finance departments are working to get the state to
recognize the city’s increased ambulance-fee schedule for Medicare and Medi-Cal
The city still has a lot
of debt and must adhere to a strict spending plan, Lobatos stressed. However, sales
tax in the city was up slight in all areas in September 2019 vs. September 2018.