New Budget Forecast Shows Best Case $5.8 Million Shortfall

New financial projections from the city of Santa Monica indicate a dramatic decrease in the expected budget deficit over the next five years.

The analysis shows a best case scenario of a $5.8 million budget deficit by fiscal year 2017-18, down from an estimated $15 million. The worst case scenario also shows improvement, dropping from $29 million in the initial projection to $13.2 million.

The projected shortfall is due to increased retirement expenditures and if the city has to take on more costs once absorbed by the now-defunct community Redevelopment Agency.

The savings were found by reducing operating budgets, establishing more efficient staffing structures by eliminating vacant positions and reducing overtime budgets, according to a city staff report.

The city also hopes to recover costs through park trainer fees, filming fees from the interim use of the Civic Auditorium and new non-resident library access fees.

"In the next year, finance staff will be strengthening the compliance, audit and collections program to ensure taxes and fees owed to the city are identified and collected," the report states.

Staff projected the city will be in the black for both the current (2013-14) and next fiscal year (2014-15).

The latest proposed budget includes an estimated $1 million new cost to the city due to the implementation of the Affordable Care Act.

"Alongside these new costs will be the continued escalation of healthcare premiums, which are anticipated to increase by at least 14 percent per year over the next two years," according to the report.

Santa Monicans will be able to comment on the proposed budget at study sessions on May 27-28. A budget adoption hearing is set for June 25.

SEE ALSO:

Best Case City Budget Forecast: $15 Million Deficit

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