At a March 3 meeting, representatives from the city's Financial Management Department presented the fiscal year 2010 Mid-Year Budget Monitoring Report to four members of San Diego's Budget Committee.
"General fund projections are currently projected to have a year-end shortfall of $11.2 million dollars," said financial manager Angela Colton.
Colton went on to explain that the city's budget shortfall could be much worse, as the city estimates revenue deficits will total $59.3 million for this fiscal year, due mainly to lackluster revenues from sales tax, which fall $25.1 million under budget, and transit occupancy tax, which fall $10.1 million under, as well as underperforming departmental revenues.
Despite saving $16.5 million in department expenditures due to position vacancies, a $42.8 million gap between the decline in revenues and city department expenditures remains. To help bridge the gap, the city plans to use $31.5 million in "carry-forward appropriations" from previous years, money that was set aside for ongoing city contracts but was never used.
As if this year's projected shortfall wasn't enough bad news for the city, after the presentation, differences over next year's budget deficit projections between the city's chief financial officer, Mary Lewis, and independent budget analyst Andrea Tevlin surfaced.
"Of course, since our revenues declined this year...it will affect revenue projections for next year," said Lewis. "At this point, we're thinking in the range of $10 to $15 million."
That number does not factor in the Annual Required Contribution (ARC) payment for the city's pension system.
"That's another $15 million," said Lewis of the pension payment.
Tevlin, however, predicts a much greater budget shortfall for next fiscal year. Tevlin says that rough estimates from her office indicate that the $15 million revenue deficit suggested by the mayor's office is closer to $30 million.
"We're in disagreement on that, but this is very early," said Tevlin. "For 2011, if you take the [Annual Required Contribution] and our revenue projections, we're looking at a $45 million dollar deficit for 2011."
As for this year's shortfall of $11.2, city officials want to look into finding reductions in contract spending, decreasing discretionary spending, and decreasing expenditures before any other budgetary mitigation occurs.
After the budget report, the committee unanimously agreed to place the 2010 Mid-year Budget Monitoring Report on the city council's agenda for deliberation.