Temecula to Build $700,000 Budget Surplus

Temecula will build a surplus during next fiscal year, according to a projection.

The city held a workshop to discuss the budget Wednesday at the Civic Center.

The revenue for the 2011-2012 fiscal year was projected at slightly less than $54 million, and the proposed expenditures was proposed at slightly more than $53.2 million.

This should leave the city with about $700,000 extra at the end of the fiscal year, said Shawn Nelson, the city manager.

The city will also feed about $220,000 into its reserve fund, which it sets aside for “economic uncertainty,” according to a report.

The reserve fund amounts to $10.8 million, about 20 percent of the general fund.

“We’ll not only have our 20 percent reserve fund, we’ll have a surplus in our general fund,” Nelson said at the meeting.

The city had to make some sacrifices. It froze cost-of-living salary increases and altered the pension plan for city employees. They will have a two-tiered system, where new employees will get two percent at age 60.

“This is one of the most significant steps public agencies can take to control pension costs,” Nelson said. “I think it’s a very good step in the right direction.”

The city has 153 fulltime employees, Nelson said.

Councilmember Mike Naggar commended the new pension plan and suggested the city consider moving to a defined contribution plan because working at one place for 20 or 30 years and then retiring is “not in vogue anymore.”

Councilmember Chuck Washington cautioned this plan was badly received in other businesses. “I think (the employees) have been taken advantage of,” he said.

It took cuts to make balancing the budget possible, Nelson said. “At every step along the way… we made tough choices that had to be made and never lost sight of the target: to maintain the programs and services that are most important to the citizens.”

Having extra money is good, but the amount is not much in the big picture, Naggar said.

“The fact that we’re $700,000 under budget is fantastic,” Naggar said, “but it’s far from being flush with money.”

The city projects it will take in $25.23 million from sales tax, $7.27 million from other government agencies, $5.66 million in property tax, $4.68 million in reimbursements, $3.37 million in franchise fees, $3.28 million in licenses and service charges, $2.98 million in transfers, $2.2 million in hotel tax, about $570,000 in interest and $200,000 from other sources.

The city’s proposed budget will spend 49 percent of its funds on public safety, such as police and fire services. Fifteen percent will go to public works, 14 percent will go to administration and 13 percent will go to REST, seven percent will go to community development and two percent will go to economic development.

To see the city’s budget for its general fund, click on the photo gallery above.