A diverse economy, coupled with fiscal discipline and careful planning, has helped minimize the affects of the recession on the city of Carlsbad.
Essential city services have been preserved, and the city is continuing to invest in important infrastructure and technology. Maintaining a balanced budget through the current recession has required keeping a close eye on the economy and adjusting city financial forecasts to ensure spending is kept in line with declining revenues.
For most economists, the debate is not when the recession will end, but about the strength and durability of the recovery. At a recent City Council meeting, Marney Cox, chief economist for SANDAG, said he believes the regional economy has bottomed out and should slowly continue to bounce around the bottom for some time before starting to climb back out.
With consumer spending patterns unlikely to return to their previous levels, impacts to city revenues will likely be felt for years to come. Just like any private business, the city must keep spending in line with revenues.
Although the city ended its 2008-09 fiscal year in the black, its general fund revenues finished the year at $883,000, or 0.76 percent lower than estimates made in January of 2009. The difference was primarily due to declines in sales, property and transient occupancy (hotel) taxes, which are the city's three largest sources of revenue.
Although property taxes were up $3.2 million, or 6.9 percent, for the year, they fell short of projections. Assessed values increased by 7.6 percent over the prior fiscal year, but current property taxes were up by only 6.5 percent due to an increase in people not paying their taxes or not paying on time.
Overall, sales tax revenues are down 11.6 percent compared to fiscal year 2007-08, and down 6 percent from January 2009 estimates. Of the city's top 25 sales tax generators, 11 are auto dealers, which have been hit hard by the recession. Car sales now make up approximately 21 percent of the city's sales tax revenue, down from 27 percent.
Revenues from transit occupancy taxes also were down. Actual 2008-09 revenues were $12.8 million, down 10.7 percent, or $1.5 million, from the prior fiscal year. The two largest resorts in Carlsbad saw their TOT drop by $1.6 million, although this decrease was partially offset by an increase in new hotel rooms in the city. The opening of the Sheraton Carlsbad Resort, Hampton Inn and Homewood Suites, combined with the closing of the Olympic Resort, resulted in a net increase of 416 rooms.
Development-related revenues are a good economic indicator on how things are going in the city. Last fiscal year saw the lowest level of development-related revenues since 1994. Development revenues decreased 50 percent from fiscal year 2007-08.
The city permitted 107 residential units last fiscal year, compared to 339 units in fiscal year 2007-08. For commercial and industrial space, the city permitted 237,935 square feet, compared to more than 1.2 million square feet last fiscal year.
Development-related revenues represented 1.5 percent of total general fund revenues for the year. In a typical year, they represent 3 to 4 percent.
To manage with significantly reduced revenues, the city has taken a number of steps, including cutting back on spending in all departments and reducing the size of the workforce by not filling open positions unless absolutely necessary.
The city also is using technology to get more done with less. The goal is to minimize affects on city services, with a priority on essential health and safety services.
Maintaining infrastructure continues to be a priority, with several public works projects slated over the coming year. Road-widening improvements are in the works for El Camino Real from Tamarack to Chestnut avenues.
Streets are being repaved or sealed throughout the city. A 100-year-old bridge along southbound Carlsbad Boulevard over Encinas Creek is being replaced.
Water and sewer infrastructure improvements are being made, including a sewer force main on Jefferson Street along the south side of the Buena Vista Lagoon, and the continued expansion of the city's recycled water distribution system.
Earlier this year, the city met with local businesses to develop a plan for stimulating the local economy. In addition to contributing $100,000 to the Endless Summer tourism promotion campaign, the city has established an arts incubator project in the Village and is looking at ways to increase marketing partnerships.
The city also is working with a cross section of representatives from the building and development industries to recommend possible ways to continue to improve the development review process.
Essential city services have been preserved, and the city is continuing to invest in important infrastructure and technology. Maintaining a balanced budget through the current recession has required keeping a close eye on the economy and adjusting city financial forecasts to ensure spending is kept in line with declining revenues.
For most economists, the debate is not when the recession will end, but about the strength and durability of the recovery. At a recent City Council meeting, Marney Cox, chief economist for SANDAG, said he believes the regional economy has bottomed out and should slowly continue to bounce around the bottom for some time before starting to climb back out.
With consumer spending patterns unlikely to return to their previous levels, impacts to city revenues will likely be felt for years to come. Just like any private business, the city must keep spending in line with revenues.
Although the city ended its 2008-09 fiscal year in the black, its general fund revenues finished the year at $883,000, or 0.76 percent lower than estimates made in January of 2009. The difference was primarily due to declines in sales, property and transient occupancy (hotel) taxes, which are the city's three largest sources of revenue.
Although property taxes were up $3.2 million, or 6.9 percent, for the year, they fell short of projections. Assessed values increased by 7.6 percent over the prior fiscal year, but current property taxes were up by only 6.5 percent due to an increase in people not paying their taxes or not paying on time.
Overall, sales tax revenues are down 11.6 percent compared to fiscal year 2007-08, and down 6 percent from January 2009 estimates. Of the city's top 25 sales tax generators, 11 are auto dealers, which have been hit hard by the recession. Car sales now make up approximately 21 percent of the city's sales tax revenue, down from 27 percent.
Revenues from transit occupancy taxes also were down. Actual 2008-09 revenues were $12.8 million, down 10.7 percent, or $1.5 million, from the prior fiscal year. The two largest resorts in Carlsbad saw their TOT drop by $1.6 million, although this decrease was partially offset by an increase in new hotel rooms in the city. The opening of the Sheraton Carlsbad Resort, Hampton Inn and Homewood Suites, combined with the closing of the Olympic Resort, resulted in a net increase of 416 rooms.
Development-related revenues are a good economic indicator on how things are going in the city. Last fiscal year saw the lowest level of development-related revenues since 1994. Development revenues decreased 50 percent from fiscal year 2007-08.
The city permitted 107 residential units last fiscal year, compared to 339 units in fiscal year 2007-08. For commercial and industrial space, the city permitted 237,935 square feet, compared to more than 1.2 million square feet last fiscal year.
Development-related revenues represented 1.5 percent of total general fund revenues for the year. In a typical year, they represent 3 to 4 percent.
To manage with significantly reduced revenues, the city has taken a number of steps, including cutting back on spending in all departments and reducing the size of the workforce by not filling open positions unless absolutely necessary.
The city also is using technology to get more done with less. The goal is to minimize affects on city services, with a priority on essential health and safety services.
Maintaining infrastructure continues to be a priority, with several public works projects slated over the coming year. Road-widening improvements are in the works for El Camino Real from Tamarack to Chestnut avenues.
Streets are being repaved or sealed throughout the city. A 100-year-old bridge along southbound Carlsbad Boulevard over Encinas Creek is being replaced.
Water and sewer infrastructure improvements are being made, including a sewer force main on Jefferson Street along the south side of the Buena Vista Lagoon, and the continued expansion of the city's recycled water distribution system.
Earlier this year, the city met with local businesses to develop a plan for stimulating the local economy. In addition to contributing $100,000 to the Endless Summer tourism promotion campaign, the city has established an arts incubator project in the Village and is looking at ways to increase marketing partnerships.
The city also is working with a cross section of representatives from the building and development industries to recommend possible ways to continue to improve the development review process.