Fullerton City Council unanimously approved a mid-year budget appropriation of $19 million, increasing the city’s budget from about $216 million to $235 million, at a City Council meeting Tuesday.
The report split the $19 million appropriation into two categories: $8.5 million in additional appropriations and $10.7 million capital improvement projects that were approved in 2011-2012 budget, but were not carried over into 2012-13.
Julia James, director of administrative services for the city, presented the recommendation to the council, citing the dissolution of the redevelopment agency (RDA) and oversights in drafting of 2012-13 budget as reasons for the increase.
Redevelopment agencies, local government bodies designed to improve areas under economic distress, were dissolved by the state of California as part of the Budget Act of 2011 in order to put property tax revenues towards payments on existing bonds and other obligations.
However, redevelopment agencies can be used by local governments to create developments that generate sales-tax revenue that can be used for other projects.
Prior to the RDA dissolution in March 2011, the City Council moved ownership of nearly 80 properties owned by the RDA to city ownership in order to avoid losing them.
These included the Fox Theatre, the Fullerton Museum Plaza and the train station.
The Richman Community Center was being constructed during the RDA dissolution.
According to the letter to the council drafted by James, the city was required this year to pay the county $7.7 million in low and moderate income housing funds as part of the RDA dissolution.
The remaining $850,000 of additional appropriations is the management fee for the operator of the Brea Dam Recreational Area.
The recreation area includes a tennis center, golf course and sports complex. When the golf course lease was re-negotiated two years ago, this salary was not included by oversight.
“I can assure you that the revenue that we are getting from the golf course does cover these costs, it was just inadvertently left out when we were putting the budget together,” said James.
The $10.7 million the council approved to appropriate went toward capital improvement projects. These include improving street conditions, renovating public parks and maintaining public buildings and facilities.
According to the 2012-13 project revisions, the largest projects the city will be working on are improving bridges, streets, traffic signals and street lights.
While the council questioned the description of a couple items, all were in agreement of making the appropriations. Due to the RDA dissolution, it is difficult to anticipate changes coming from the state government.
“Its been a very unsettling situation for every former agency,” said Joe Felz, who was the executive director of the RDA before it was dissolved.
According to James, the city is up in revenues and under budget on expenditures and internal transfers of funds are lower than expected.
She expects the city will end the year with revenues of around $75 million, $3 million up from the projected revenues of $72 million. Expenditures for the city should run a little below $73 million.
Revenue primarily came from the dissolution of redevelopment and a contract extension with trash services that will yield around $1.7 million.
Because the city’s budget is drafted in two year increments, mid-year reviews and in depth analysis allows the city to make adjustments to the budget as needed.
“Often we will deal with items and abstractions throughout the year and this our opportunity to connect the dots a little bit,” said Mayor Bruce Whitaker of the in-depth budget review.