The archway entrance into the city of Temecula in Southern California (photo: MR38/Flickr)
When it comes to California city governments, it seems as if we’ve been hit with the same headlines over and over again lately: “Impending bankruptcy threatens California city;” “California city may declare fiscal emergency;” or “California Mayor asks for prayers as bankruptcy looms.”
We are consumed with stories about cities facing extreme budget shortages.
Well, at least for today, here’s something different: The city of Temecula has a budget surplus.
Your eyes don’t deceive you. City leaders in Temecula recently announced that the city finished the 2011-2012 fiscal year more than $2.7 million in the black.
“Simply put, we don’t spend more than we have. We’ve always been fiscally conservative,” said Mayor Chuck Washington.
In fact, for the past few years, the city has had a surplus budget of a few million dollars.
“When we budget, we’ve always done it before spending money on anything. We always say to ourselves: will we be able to sustain it for 5, 10, 15 years from now? We don’t ever want to be in a place where the income goes away. We have to be careful how we progress,” Mayor Pro Tem Mike Naggar said.
How did the city end up with a $2.67 million surplus?
The big chunk, nearly $1 million, came from higher than expected revenues.
“The council was a bit surprised to see the surplus was so high. Because of the economy, we didn’t think we’d get as much as $900,000 from sales tax revenues, but we did,” said Council member Jeff Comerchero. “Our sales tax generation is half of our operating budget, it just proves we’re doing really well and doing great things in the city.”
“The regional mall is one of the best performing in the nation—more people spending money means additional sales tax for us,” said Naggar.
City leaders also looked at each department to see where they can shave excess. In the end, they cut about $500,000 from economic redevelopment, finance, planning, public works and police departments, keeping expenses at $53.1 million.
It doesn’t stop there. The city also received more money through property taxes, building and safety, land development, fire services, bids and proposals, investments and city-owned rental properties, totaling nearly $56 million for the general fund.
“This year alone, we’ve had more than 500 businesses come to the city, they’re small businesses but the U.S. Chamber says 75 percent of businesses in the nation have 10 or less employees,” said the mayor.
For those of you taking note, here’s some food for thought:
“We run the city like you run your own budget. We don’t spend more than we take in, and we set aside money for a rainy day,” said Naggar. “Our city council is a very diverse and seasoned council that knows how, even in disagreement, to make decisions that are right for our people.”
“We made a conscious effort early on that we are going to commit whatever resources we have to make this city an attractive city to do business,” said Comerchero.
“Never regret doing it right—I hope this ends up on my tombstone because this is really what’s guided us over the years.”
Temecula’s financial situation deserves a pat on the back and a round of applause. Smart governance pays off during these tough economic times.
Periodically, the city conducts customer service surveys to get the residents feedback. Last year, 96 percent said that they were happy or very happy with the way the city is run.
“This is what happens when public officials manage public funds in a responsible way: They find ways to reduce costs. They do not make long-term commitments they can’t keep. And they grow revenue by encouraging job growth. This is what the California recovery will look like,” said California’s Executive Director Jim Mayer.
A full report on the surplus will be presented during the council’s October 9 meeting.