Revenues exceed costs in Costa Mesa

Report puts city in black by $8.2 million, $2.9 million of which is money in the bank.Costa Mesa’s budget situation improved last year, but it looks better on paper than it does in the bank account.

A December financial report for the 2004-05 fiscal year shows the city’s revenues surpassed expenditures by about $8.2 million, but city finance director Marc Puckett said a large part of that figure was due to three one-time events. When those are subtracted, the city actually came out ahead by just $2.9 million, he said.

City Manager Allan Roeder said some of the revenue boost comes from sales taxes and property taxes, which have been growing for several years. Even the hotel bed tax is up.

“First and foremost, what it means is two things, which is the local economy is doing very well,” Roeder said. “I think it also demonstrates the city’s commitment on the expenditure side [to] the ability to live within our means.”

Puckett broke down the $8.2 million revenue boost this way: $1.9 million came from a one-time reimbursement from the state for car tax money it borrowed two years ago; another $1.9 million was a gain strictly on paper because of the way the city’s investments must be reported, but that’s not money the city can spend; and $1.4 million was sales tax revenues the state overpaid Costa Mesa that the city will pay back in the current fiscal year. The remaining $2.9 million is the real increase.

“Yes, it’s favorable that we had more revenue than was budgeted, but you have to take into consideration the entire picture,” Puckett said.

“It’s very positive, but it’s not as rosy as $8.2 million might seem when you subtract out those one-time events.”

City Council members said they’re pleased with the information, but they’re not rushing out to spend the extra cash.

“It says to me that we do a good job of managing our budgets during the year and sticking with our budgeted projections,” Councilwoman Katrina Foley said. “We often, I think, underestimate projected revenues, but we are in solid fiscal health. There is no budget crisis whatsoever in ... Costa Mesa.”

Foley and Mayor Allan Mansoor said they’d like to see more capital improvements such as athletic fields and street and sidewalk repairs, if the city’s bank balance will allow it.

“I always take a cautious approach, but I certainly would like to use any extra resources that we have to focus on continuing our much-needed infrastructure repair,” Mansoor said.

Council members may still want to consider new sources of revenue later this year, Roeder said, because they’re interested in funding new programs and they may want to diversify the city’s income streams. Right now, about 40% of the city’s revenue comes from sales taxes, he said.