The city of San Diego faces a potential for budget shortfalls in the next three fiscal years when expenses for some critical needs are figured into the equation, according to a report made public Thursday.
The Five-Year Financial Outlook for San Diego's municipal government is divided into two sections — one for baseline revenues and expenses, and the other for certain extra needs deemed important by city officials in order to meet "core service levels."
The report, to be presented to the City Council's Budget Committee next week, says that with moderate growth in revenues and expenses, the baseline balance sheets are in the black for four of the five fiscal years, running through June 30, 2023.
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The exception is 2019-20, when a $9.6 million deficit is projected.
Otherwise, city financial officials foresee surpluses of $2.4 million in 2018-19, and $21.6 million, $61.3 million and $126.5 million in the three out years.
When the critical needs identified in the report are added in, the result is two additional deficit years, and lower surplus projections.
Those shortfalls begin with the next fiscal year at $10.1 million, according to the report, which is posted on the committee's agenda web page. The next two years are projected to bring deficits of $34.6 million and $19.8 million.
Projected surpluses in the final two years are lowered to $5.6 million and $59.3 million.
Among the major funding needs identified in the report are the following:
–Initiatives to deal with the homelessness problem and an associated outbreak of hepatitis A.
–Higher salaries for police officers to stem the tide of experienced personnel leaving for other agencies that offer better pay.
–Purchasing a replacement helicopter for the San Diego Fire-Rescue Department and staffing three new fire stations.
–Staffing three new libraries.
–Operating numerous new park and recreation facilities.
–Installing a new electronic voting system in the City Council chamber.
The number of dollars required for each item is broken down over the five-year period, often varying over time as programs get started.
Financial staff said city departments will be asked to submit spending reduction proposals like they were for the budget of the current fiscal year. Staff also suggested dipping into certain reserve accounts that might have funds available and carrying over a nearly $18 million fund balance from the fiscal year that ended June 30.
City financial staff stressed the report is not a budget in itself, but a planning tool.
