LA MESA PROPOSES MODEST SPENDING INCREASE AS REVENUES RISE

By Jacob Pamus 

Photo: Finance Director Tammi Royales gives presentation on proposed budget

July 3,2023 (La Mesa) – The La Mesa City Council voted  unanimously on June 27 to approve a tentative biennial budget of $130,246,110 in fiscal year 2023-24 and $133,151,664 in fiscal year 2024-25. The Council is expected to vote on a final budget in August 2023. 

Cannabis tax revenues are projected to rise sharply as new dispensaries open, with other revenue sources such as property tax and leasings also on the upswing.

General expenditures will be boosted by 6%to cover rising utility costs, as well as studies on police staffing issues and a new citywide strategic plan are among the reasons for the increase. 

This new budget is being made with open gov online, an online system that connects live financials with the budget, available in 135 languages, and is fully interactive and accessible for residents and students.

Citywide Expenditures

Expenditures for 2023-24 include $19.4 million in CIP projects like streets, upgrades to parks and sewers. Debt service payments of $2.5 million, all negotiated salary increases are included as well. Expenditures for 2023-2025 include $4.8 million in CIP projects and $2 million in debt service payments.

Revenues

Property tax is expected to increase 9.5%  in 2023-2024 and then 3.8% in 2024-2025. Cannabis tax is expected to increase 25%. Licenses and permits will increase 10% in FY24 and then flatten out in FY25. Due to newly negotiated leases, rent from city owned property will increase 10%. Service charges are expected to rise 6% and 3.8% 

Total Expenditures

General Fund expenditures will increase 6% in 2023-2024, and decrease 1% in 2024-2025. The largest expense is $14 million or 20% required pension obligations including underfunded liability. Professional services will decrease from FY24 to FY25. Utility costs will also increase 12%.

Operating Costs

Increases were calculated on inflation and increases in costs as business services resume. Studies being conducted include a new citywide strategic plan, CAP energy reduction plan on municipal buildings, fire department standards of cover study, and a police department staffing analysis

Proposed Staffing Additions

Records Technician for City Clerk, Fire Battalion Chief (112 hours) in Heartland JPA, and two Outreach Specialists for Permanent Local Housing allocation

General Fund Reserve Policy

Rainy Day Reserve-15% of General Fund Expenditures for one-time emergencies. Cash Flow Reserve- 25% of General Fund Expenditures to provide cash flow funding to offset timing differences between revenues and expenditures. In 2023-2024 general fund reserves will be $37,315,146 and for 2024-2025 it will be $34,645,036

Appropriations Limit

This places annual limits on the appropriations of tax proceeds that can be made by the state, school districts, and local governments in California

Read more on what the budget includes in this staff report.