The Chula Vista City Council last week submitted a proposed general fund budget of $249 million to pay for its day-to-day operations in the 2022-23 fiscal year, which comes into effect in July.
Preliminary numbers show the city will spend about $31 million more than its current spending, which city council approved in May at $218 million. The budget is expected to be balanced, however, as the city also plans to raise an equal amount of revenue.
Its biggest expenses are personnel costs, which are expected to increase by $4.7 million from the current year to a total of $103 million, according to the proposed budget. Most of the increase in expenditure under staff costs is budgeted for salary increases. The city plans to pay an additional $5.3 million for salaries. Health insurance, pension expenses, city liability insurance and utility costs also drove up his expenses.
The city also expects to have a total of $3 million, or $1.3 million more than the current year, in savings directly related to vacancies, said Ed Prendell, director of budget for the department of city finances.
“One of the things we experience, like most employers, is that we have difficulty filling vacancies. For the fiscal year (2023), we anticipate that will be a challenge,” Prendell said.
Although spending is expected to increase, so is the city’s revenue.
Most of the revenue from the proposed $249 million is expected to come from sales taxes from Measures A and P, which are expected to raise about $26 million each, or $6 million more than the current budget.
Measure P, which voters passed in 2016, is the half-cent infrastructure sales tax, and measure A, which voters passed in 2018, is the half-cent sales tax to support public safety personnel.
Chula Vista’s property taxes – its biggest source of revenue – are expected to bring in about $1.4 million more, for a total of $41 million. Its second revenue stream, sales tax, is expected to bring in $44 million, an increase of $4 million.
While revenue projections are based on assumptions, “we’re very conservative in our approach,” Prendell said.
“We believe property tax will continue to rise,” he said, adding that sales tax increases have been driven primarily by online sales and he credits this trend as “one of the benefits of the pandemic”.
According to the proposed budget, other sources of revenue include a $1.6 million increase in franchise royalty revenue and $13 million in transfers coming directly from federal stimulus funding.
The city is expected to provide further consideration of the proposed budget at a May 10 council meeting. The city council will consider adopting it on May 24.