Next year's city-sponsored fireworks show will more than likely become one of San Juan Capistrano's budget causalities.
The majority of the City Council said Thursday night that they favor cutting the display and asking local businesses to pay for it instead.
"Fireworks? Ah, who cares?" Councilman Larry Kramer said, partly in jest. "We could always find sponsors." Mayor Sam Allevato suggested that the auto dealers pitch in, since the Redevelopment Agency has given a couple of them money to open.
Although sales tax revenue is forecast to pick up next year with the addition of three on the south side of town, a new and a , San Juan Capistrano's finance department is projecting a deficit in its budgets for the next 10 years.
Although it will gain new business, San Juan and will lose several fast-food joints due to the realignment of Del Obispo Street and
The City Council will need to make cuts to services to stay in the black, unless tax revenue, grants and other revenue sources pour in more than expected.
A draft budget for the next fiscal year has San Juan Capistrano spending 12 percent less, or $2.7 million, than it did this year.
The general fund—a catchall account for discretionary spending, such as public safety—will shrink $4.4 million to $21.1 million, largely due onetime losses: a $3.2-million payment to settle a land dispute with the ; a $450,000 energy efficiency grant from San Diego Gas and Electric; and a $383,000 grant for that expires in March.
Also on the chopping block in fiscal year 2011-12: $40,000 in thistle abatement in , $25,000 in slurry sealing for bike lanes, $20,000 for trail maintenance and $15,000 in public relations, among others, totaling $430,137 in non-salary reductions.
More money, however, will be spent next year on: police services ($280,000), traffic studies ($22,000), water ($60,000), electricity ($57,000), among others, totaling $571,000 in spending increases.
Most payroll expenses also come out of the general fund. Personnel reductions will total $362,000, mostly from the elimination of six positions. An additional $193,000 in personnel cuts will be absorbed by other city budgets outside of the general fund.
Meanwhile, personnel costs will grow by $426,000: $190,000 in higher retirement costs, worker compensation and other benefits; $128,000 to restore a onetime decrease for a ; $62,000 in cash-outs for departing managers; and $46,000 for step increases.
The general fund budget operates independently from three other budgets: enterprise accounts tied to utilities, the and the Capital Improvement Plan account.
General Fund Revenues
Leading up to the Great Recession, revenues were well above expenditures—they reached an apex in the fourth quarter of 2006 at $7.5 million. Since then, the city has seen a dramatic decline.
Next year, however, property, sales and other taxes are actually expected to rise $477,000, or 4.2 percent, as home sales picked up in recent months, interest rates are lower and because of the new car dealerships (Orange Coast Chrysler-Jeep-Ram-Dodge, Paradise Automotive and Tuttle-Click's Capistrano Ford).
Franchise fees and motor vehicle license fees are also expected to climb $41,000. Although the new Marriott is slated to open in February, city staffers only budgeted for a minor increase in bed taxes.
Building permits and developer fees are projected to slow 14 percent, or $232,000, from a sharp increase seen this year.