San Juan Council Approves “Tight” Budget

After months of hard work and faced with difficult decisions, the San Juan Capistrano City Council can breathe a little easier today after adopting the Fiscal Years 2012-2013 and 2013-2014 Operating Budgets, and Fiscal Years 2012-2019 Seven-Year Capital Improvement Program, by a 5-0 vote Tuesday evening at City Hall.

Approving the two, one-year operating budgets was a first for the city, with only 11 days to spare on its current budget that expires June 30. The council hopes the two years will provide a little flexibility and reduce the cost it takes for the City Manager, Treasurer and Council’s staff to come up with a new budget every year.

However, the City Council will be receiving quarterly reports from its staff on the budget’s progress so adjustments could be made moving forward.

“Months and months of work have gone into this budget and the city’s staff has to be commended,” said Mayor Larry Kramer. “It’s a tight budget, especially this next year. It’s a tough one, but it’s well done.”

Even Councilmember Derek Reeve, who has been extremely critical of budgets in the past, preferring a more conservative approach to spending in order to protect revenues, said he could find little to complain about this time around.

“The most important thing is we have made cuts, we have a conservative estimate on revenues and the budget balanced, and if anything goes haywire or gets better we can adjust things on a quarterly basis if necessary." Reeve said.

The good news is that the budget is balanced as expenditures equal revenues plus the sources of funds. Financial policies have been met for General Fund, Sewer and Internal Service funds. The city has been able to meet and exceed its reduction in fresh water, and improvements were made in the General Fund Contingency Reserve.

For Fiscal Year 2012-2013, the Contingency Reserve is expected to be 25.7 percent, while in Fiscal Year 2013-1014 that figure is expected to be 31.6 percent, which falls within the contingency reserve of between 25 percent and 50 percent.

Overall, revenues for FY 2012-13 are expected to total $66 million, while for FY 2013-14 revenues are expected to reach $67.4 million. That includes capital reserves of about $11 million each year. Meanwhile, expenditures for FV 2012-13 are the exact same about as revenues, while in FY 2013-14 expenditures are suppose to decline to $63.4 million.

When all is said and done, the city will have approximately $80 million in reserves.

“This is one of the toughest budgets I’ve seen in nine years on this dais,” Councilmember Sam Allevato said.

In other City Council news:

Advocacy Group Loses Contract

One victim of the budget cuts was Townsend Public Affairs, Inc., which has provided advocacy, public relations and regulatory services for the city for many years. Its $60,000 annual fee was not included in both fiscal years, and the council voted 4-1 (with Laura Freese voting no) to end its relationship with Irvine-based Townsend, at least temporarily. “We’ll see how we do the next three to six months,” Allevato said.

Third Time is the Charm

The first was the third amendment to the Five-Year Law Enforcement Services Agreement for FY 2012-2013 with the Orange County Sheriff’s Department. The annual budget increased by $191,000, but that is down from the original $350,000 increase. The majority of the cost increases were identified as transportation ($62,000, due to rising fuel costs and vehicle maintenance) and overhead costs ($50,000, for administrative personnel), but budgeted overtime costs did decrease by $54,000 last fiscal year, according the OCSD report.

Thumbs Up for Drainage Project

The Mitigated Negative Declaration for the Sun Ranch Drainage Improvement Project received the green light. The council approved plans and specifications for the $3.22 million project, which calls for the construction of public storm drainage improvements within the existing drainage channel between Sun Ranch and the Scalzo Family Trust property. Construction of the drainage channel complies with the city’s “Master Plan of Drainage” and public facility design standards.

Once a contractor has been chosen and permits are secured from different agencies, construction of the pipeline could begin as early as September and would take about three months to complete, according to Design Engineer David Stuetselof Hall & Foreman.

 Assembly Use Amendment Approved

It took almost less time for the City Council to adopt it than for it to be read, but a Land Use Amendment to Title 9, Article 3 and Appendix “A” Definitions of the Municipal Code Regarding Assembly Uses was approved 5-0. The municipal code was changed after a semiweekly home Bible study drew complaints from neighbors.

On June 5, the Planning Commission approved the draft code amendment that had been simplified by removing the proposed definition of "assembly use, routine", and removed the 50 person occupancy provision. The definition of church also was revised and the District Tables were amended to be consistent with the revised church definition.