On the wall above the mayor’s chair, inside the La Mesa City Council chambers, is a mural of the city’s seal. At the top of the mural reads “City of La Mesa,” at the bottom: “Jewel of the Hills.” At a recent meeting, citizens learned that their jewel might not be getting the polish they’d expected.
During the February 24 meeting of the La Mesa City Council, the city’s financial director, Gary Ameling, reported on the city’s dwindling cash flow and expressed to council members and the public that the new sales-tax initiative passed last November might not be as valuable as the city believed it would be.
According to Ameling, La Mesa is in the grips of a four-million-dollar structural deficit. During the past year, La Mesa officials examined different strategies to save money and reduce the deficit. So far, the city has contracted more public services out to private companies, eliminated city positions, implemented a hiring freeze, hiked up city fees, and sold off city property.
In a further effort to relieve economic strain, at a January 20 budget workshop, city council members and financial experts found an additional $150,000 in savings for this fiscal year by waiting to make changes to the city’s general plan, canceling some city commissions, and eliminating unneeded maintenance costs.
A recurring theme in Ameling’s address seemed to be making sure everyone was aware that the sales-tax increase set to be imposed on April 1 won’t bring in as much cash as was expected.
“Back in November, the city’s citizens chose to increase the city’s sales-tax rate by three-quarter percent, which should generate some revenue for the city. Unfortunately, because of the recession, all of our revenue sources are being impacted, and we expect that the monies we expected to receive from Proposition L will be quite a bit less.”
Ameling also touched on La Mesa’s need to bolster the city’s financial reserves. Historically, the city has maintained its reserves at around 15 percent. Those reserves are dwindling.
Ameling mentioned a meeting with Moody’s Investor Services a few years back at which the firm encouraged the city to raise the reserve levels. “They felt that our reserve level, based on the mix of type of businesses we have in our city, may be a little low based on other smaller California cities.”
Ameling ended the update with a suggestion for the city to consider raising the reserve level from 15 to 25 percent.
For more on La Mesa’s cash-flow problems, go to the city’s March 17 budget workshop at 8 a.m. at 8034 Allison Avenue (Fire Station 11).