By Neil Farrell

The City of Morro Bay will adopt a balanced budget for Fiscal Year 2015-16, with monies being shifted from one account to another and changes made to various policies, including growing the general fund reserves past what the City’s fiscal policies call for.
Indeed, change has come to the way the City looks at the future, as this budget starts taking a somewhat different tact. Instead of looking at the projected revenues and then budgeting accordingly so-called “cash based” budgeting, City Manager David Buckingham’s first budget is in many areas based on goals and objectives established by the city council back in January.
The general fund, which covers basic services — public safety and public works — now tops $12 million in projected revenues. Add in $4.5M for water revenues, $5.7M for sewer; and $1.9M for harbor, plus various other sources of money, and the overall budget is more than $34.8M.
At $11.9M in expenditures the general fund shows a $75,000 surplus.
The budget projects getting $8.8M from “taxes” — mainly property ($3.7M), sales ($1.6M) and transient occupancy or TOT ($2.8M). Some $1.12M would come from “charges for services” and $1.18M from inter-fund transfers out of the water, sewer and harbor enterprise funds. Such transfers are supposed to pay for services rendered by City Hall, like administration, billing and human resource, among others.
The budget shows the police department as the highest general fund cost, some $3.5M ($3M in employee costs). The Fire Department is at $2.2M ($2.28M); Public Works at $2.1M ($1.97M); Recreation at $948,000 ($930,00); and “administration” including finance and human resources (City Hall) is at a combined $1.47M, with all but some $62,000 for employee costs.
The newest department, Community Development (planning and building), is at $888,000, all in employee costs. Com-Dev was created by Buckingham several months ago, when he shuffled the deck in the bureaucracy and moved maintenance duties out of recreation and back into public works and created the new department.
There’s some $100,000 out of the Comm-Dev budget to hire a part-time code enforcement officer(s). The City was criticized by the Grand Jury over deficiencies in its code enforcement snd might hire two people with varying expertise.
The city attorney’s is budgeted at $182,000 and city council seems like a bargain at $110,000.
Other notable line items include $775,000 in Tourism Business Improvement District (TBID) assessments, and for the first time, $287,000 from the County Tourism Marketing District. These are assessment fees based on costs for a lodging night — 3% and 1% respectively.
Buckingham explained that there are several “buckets” or accounts where they should be placing money every year, in anticipation of big costs down the road. Not all of the buckets will have money put into it with this budget.
As an example he said elections cost about $20,000 and they’ve put half that into a special elections fund, choosing to split the costs. He’s also budgeted some $30,000 into a “City Manager’s Economic Opportunity Fund,” which is “a discretionary fund for the City manager to use as appropriate for unidentified projects and items, related to improving our economic/fiscal situation.”
The budget gives $50,000 towards a visitor’s center, the contract for which is out for bids now, and zero to the Chamber of Commerce’s “business incubator services.”
There’s also $100,000 for “planning services” to go towards updating various City specific plans to avoid the situation wherein a plan becomes seriously outdated. The City also dedicates some $300,000 towards updating the general plan and local coastal program. Add in grants for this work and the City now has $800,000 for the update, enough to let a contract and get started on what’s expected to be a multi-year undertaking.
With 96.5 fulltime equivalent employees — down from 100.25 the past two years — some changes that have been made over the past year are now officially part of the budget. Those would include the elimination of the department head position of recreation and parks director, replaced with a deputy city manager at $160,000.
The Risk Management Fund — money set aside to cover potential uncovered legal costs — is being dropped from a required $500,000 to $100,000, which frees up some $800,000 to be spent. The budget puts $100,000 for ADA compliance; $300,000 for the general plan update; $85,000 towards developing an Internet-based system for planning and building permits, and business licensing; $100,000 for information technology upgrades; and $75,000 for economic strategic planning with this one-time money.
The Measure Q half-cent sales tax is projected to top $923,000 in revenues. Buckingham plans to bring to council a plan for borrowing money to improve street repairs, possibly using some of M-Q’s $550,000 available to pay debt service on that.
The Harbor Fund, at $1.89M ($1.01M personnel) and includes $25,000 for a project to improve the fish cleaning station at Tidelands Park. Buckingham is also contemplating giving the Harbor Festival $5,000 in a one-time expenditure out of the harbor fund.
The 217-page budget was to be finalized at this week’s meeting and is posted on the City’s website for download, see: www.morro-bay.ca.us.