City Council Evaluates Budget, Which Has Healthy Reserves

As a part of its annual budget review and adoption process, the La Cañada Flintridge City Council learned last week that the city, which continues to keep more than $17 million in reserve, is expecting to see about $17,000 less in sales tax revenue than in the past year.
Not all of that can be attributed to the loss of LCF-based sporting goods giant Sport Chalet, cautioned City Manager Mark Alexander, who specified that he isn’t legally permitted to reveal what sales tax a particular store generates.
“You can’t make that assumption. There are other things that play into that,” Alexander said.
Council members learned from city staff that LCF is operating with proposed general fund revenues of $13,162,350 and proposed expenditures of $12,413,925.
The council will reconvene on Monday, June 27, at 8:30 a.m. to discuss consideration items from community groups. Alexander said the council will have $748,425 to allocate toward requests that total $1.18 million for a diverse collection of local causes. The council also will weigh which capital improvement projects to fund from that same pool of money, Alexander said.
Last year, he said, the city funded $302,000 of the community group requests.
City Councilman Dave Spence said the community might be asking for too much from its city.
“We should probably look at considering a cap on community group requests,” the veteran councilman said. “Any time we give anybody something, the next year it’s a little bit more and a little bit more and a little bit more. And now that we’re having a problem with tax revenue, potentially, this year, I personally think we should put a cap on this.”
Public safety leads the expenditures to which the city is committed, with more than $3.4 million dedicated to paying for L.A. County Sheriff’s Department personnel. In addition, there are services such as directed patrols for events such as the Fiesta Days Parade and the school resource officer who works as a liaison for the La Cañada Unified School District.
Capital projects are the next biggest expenditure, with $3.1 million budgeted to pay for the city’s major infrastructure jobs.
Other proposed items of note in the forthcoming budget include setting aside $13,000 for a 40th year of cityhood celebration, as well as $96,425 for a City Council election this fall.
Council members also discussed the city’s tradition of keeping close to 150% of its operating budget in reserves.
Councilwoman Terry Walker said she’s heard from some community members who think having that much put away might be excessive: “[Some people] say our reserves are too high and we should invest them back into community projects.”
Director of Finance Dan Jordan said he believes it makes sense for a small city such as LCF to have as much in the bank as it does, partly because “it does help your finance director sleep well at night,” but also because “we need to have more because we’re small, and if a big pipe breaks in L.A., and it’s $4 or $5 million, they can right the problem quickly. But that’s a big hit to us. The general idea is the smaller the city, the larger your reserves relative to annual expenditures.”

Leave a Reply