DOWNEY – Buoyed by a healthy economy and an expanding sales tax base, the Downey City Council is poised to adopt a $260 million fiscal budget, even if “significant challenges” are beginning to appear on the horizon.
The balanced spending plan totals $259,942,802 and is all-inclusive, meaning it includes operational expenditures resulting from Measure S revenues and includes infrastructure investments financed by Measure S bond funds.
Measure S is the half-cent sales tax increase Downey voters approved in 2016.
Overall, the proposed budget is 2.7% larger than Downey’s 2018-19 fiscal year.
Expenditures are projected at $99.9 million, funded by estimated revenues of $93.9 million.
“When developing the budget proposal, the Council has directed that staff continue the high-quality programs and operations at the same level of effort from the previous fiscal year, with additional expenditures stemming only from the Measure S related activities and bond-funded construction program,” City Manager Gilbert Livas wrote in the budget proposal.
There are no capital improvement projects or operating costs funded through General Fund reserves, which are projected to reach $30 million by the close of the next fiscal year, Livas added.
The proposed budget – which still needs formal approval from the City Council before July 1 – projects steady increases in property tax and sales tax revenues, along with a 4.3% growth in local median household income. Downey’s average household income is currently at $68,162, which outpaces L.A. County households ($65,006) and the U.S. ($60,336).
The Downey Police Department requested a 2% increase over last year’s spending plan, bringing its total budget to $36.6 million. Part of the increase can be attributed to a need for 10 new Ford Explorer police interceptors ($865,000) and four Chevy Colorados ($92,600).
In addition, the police department will rent 18 new vehicles at an annual cost of $111,250.
The Downey Fire Department saw its proposed budget rise 8% over last year to $23.2 million. Its budget includes requests for new equipment such as ECG monitors and defibrillators, and four new leased vehicles.
Mayor Rick Rodriguez, the only candidate to endorse Measure S when he campaigned for City Council in 2016, praised the proposed budget.
“We’re delivering exactly what we promoted to Downey: a public safety initiative that supports our police and fire departments,” said Rodriguez. “We’re getting things done.”
Downey’s financial outlook isn’t without its challenges.
Officials pointed to increasing annual pension obligations which are expected to jump from $56.2 million this current fiscal year to $70.8 million in 2024.
There is also concern about a slowing housing market, a decrease in sales tax growth, and an eventual U.S. recession.
Officials added that Downey’s growth in expenditures has already outpaced the city’s revenues.
Downey will save some money as the city’s total staffing is expected to be reduced by six positions. This is a result of the city contracting with MV Transportation for its transit driver and transit dispatch services.