Simi adopts budget for 2006-07

In the past 34 years, the city of Simi Valley has never adopted an unbalanced budget. This year won't break the pattern.

Unanimously approved at the June 19 council meeting, the adopted general fund budget for fiscal year 2006-07 is $65.75 million, up just 1 percent from the previous fiscal year. According to Deputy City Manager Dan Paranick, 2005-06 was an unusually high year for revenue because developers made a number of large one-time payments to the city.

The total city budget, including funds from outside the general fund, is somewhere in the neighborhood of $134 million, down from $139.7 million a year ago.

Healthy economic times, Paranick said, enabled city staff to balance this year's budget without cutting any city services. All eliminated positions were already vacant, and only "belttightening" cuts were made, according to Paranick.

"So I wouldn't say that there are any losers in this budget. There is nothing on the expenditure side that impacted services to the public," he said.

Revenue to the city is expected be up $5 million over last year thanks to estimated increases in the amount of money received from property taxes, sales taxes and state Article 8 Local Transportation Funds (LTF), Paranick said. LTF money is gasoline tax revenue the state gives local municipalities to use for transportation-related purposes, and the increase is clearly the result of higher prices at the pump.

Paranick said the expected $2.6-million increase in sales tax revenue-which he attributes to purchases made at the new Simi Valley Town Center-is significant in that it will help make up for the $1-million drop expected in building permit revenue to the city in 2006-07. Permits aren't being issued nearly as often as they were during the development boom of the previous few years.

"Instead of being developerdriven-related revenue, right now we're relying on sales tax more to sustain operations like police services, like transit services, like fixing streets and potholes," Paranick said.

The estimated $1.2 milliongrowth in property tax revenue is a sign that the city expects the housing market to continue to thrive in the coming fiscal year, despite some signs of slowing.

"(That number) is largely driven by values of homes and also new homes that are coming into Simi," Paranick said. "An increase in property tax is based on assessed value increases, and that leads to existing home values going up."

If there is any clear-cut winner in this year's budget, it's the Simi Valley Police Department, which suffered no budget cuts and was provided with around $300,000 in new capital requests. That money will go toward such things as replacing freezers in the evidence room ($30,000), replacing one radar speed advisement trailer ($22,000), purchasing 12 portable radios ($62,000) and buying 125 nonlethal Tasers ($131,900). See related story on page 7.

Overall, 20 requests for new money were approved, and nine were related to the police department.

Paranick said this favorable treatment was a clear reflection of the direction of the city council.

"That's how it's supposed to work. The council prioritizes and says public safety is the No. 1 priority and therefore we're going to put most of our new money into the police department and we're not going to cut," he said.

Councilmember Steve Sojka, who also sits on the police foundation, reiterated this point.

"I think it should be the top priority of any local government to provide safety for its citizens," Sojka said. "But it's not just about throwing money at the problem. It's about spending effectively to provide the police with the tools that help them do their job better."

The public works department was granted $184,200 in new monies, $95,000 of which will go to one limited-term Community Services Specialist to aid in the city's graffiti abatement program.

The administrative services department, which had $20,000 cut from its budget for equipment maintenance, is getting an additional $51,000 to bring credit card processing to nearly all city facilities.That expansion is expected to create off-setting revenue for the city.

Currently, residents can use credit cards only at the cultural arts center and city hall. In 2006- 07, that service will be expanded to include the police station (to pay the cost of tickets), the development services building and the senior center.

The biggest increases in expenditures are budgeted under personnel, primarily for salaries and healthcare.

In part because of ongoing costs related to the hiring of additional police officers to patrol Simi's "Seventh Beat," the city is expected to pay $2 million more in regular salaries.

And with the rising cost of healthcare benefits, the city plans to spend around $800,000 more in 2006-07 than in 2005-06.

"It's a pretty healthy increase," Paranick said, "but it's going on statewide. Even private companies are seeing healthcare costs over the last three or four years have really gone up quite a bit."

Good news on the expenditure front includes the leveling off of workers' compensation costs, which are expected to be $800,000 less this year thanks to the state reform legislation, and a decrease in costs related to retirement.

This decrease, Paranick said, is a result of a stock market that is increasing the amount of money in the California Pubic Employment Retirement system, which is where the city invests the retirement funds of city employees.

With revenue expected to outweigh expenditures by around $12,000 next year, Paranick said the city's estimated ending general fund balance in July 2007 will once again be around $32.3 million.