City Approves 2012-13 Budget, Plans to Dip into 'Uncertainty Fund' to Close Gap

With the and , the city of Poway was hit with two financial blows that had a profound impact on the comprehensive financial plan for the 2012-13 fiscal year, which was approved by the City Council at Tuesday night’s meeting.

While the plan anticipates that the city’s general fund will result in a shortfall of $500,000, the gap will be closed by dipping into the State Economic Uncertainty Fund. The fund has a current balance of $3.1 million, according to John French, director of administrative services.

Mayor Dan Higginson said the State Economic Uncertainty Fund was put in place by in the event of a calamity such as an earthquake.

“This action by the state is certainly an economic calamity, something we never foreseen but certainly were prepared for,” Higginson said. “Likewise, who would have ever anticipated that we would have to loose the storm-water fee, another big-ticket item that no one ever saw.”

Each of the other councilmembers agreed that using the State Economic Uncertainty Fund was appropriate, and praised city staff for their sacrifices, including wage freezes, pension reform and reduction of the work force. The city has eliminated 60 positions since fiscal year 2008-9, a 20 percent reduction.

“If you asked any resident of the city of Poway if they have seen a decline in service, I think almost every single one would say no,” said Councilwoman Merilee Boyack.

Councilman Jim Cunningham noted that firefighters went six years without a raise in exchange for certain benefits.

On July 1, the last year of a two-year labor agreement with represented employees begins. That agreement brought employee pension contributions to the maximum levels of 9 percent for fire employees and 7 percent for other employees, according to a staff report. The agreement also includes a 5 percent raise for represented fire employees and a 3 percent raise for all other city employees on July 1, the first salary increases since July 2008.

The city is negotiating with the Sheriff’s Department on a new contract to replace the five-year agreement that ends on June 30. A staff reports estimates the new contract will cost $9.8 million for fiscal year 2012-13, up from $9.6 million in 2011-12. The new contract may result in higher costs in upcoming years for cities like Poway that have relatively new law-enforcement facilities.

The 2012-13 budget projects that sales tax revenues will increase by 6 percent, and property taxes will increase by 2 percent.

“All in all I think the general fund revenues are almost approaching the pre-recession levels,” French said. “That’s wonderful news for the community.”