NORWALK – Norwalk’s City Council this week gave the green light to a $151.5 million balanced budget for fiscal year 2019-20, a spending plan that includes funding for capital outlay projects and homeless outreach despite a half-million dollar increase to its Sheriff’s Department contract.
Norwalk City Manager Jesus Gomez said the budget maintains service levels from the previous fiscal year and encompasses the City Council’s priorities.
“Emphasis has been placed on public safety including homeless outreach, infrastructure improvements, and economic development, while maintaining fiscal sustainability,” Gomez wrote in a report to council members.
Of the $151.5 million spending plan, more than $93 million is earmarked for operations, including personnel costs and debt service. “The financial plan also includes an allocation of $48 million for 67 capital improvement projects, 57 carryover and 10 new,” wrote Gomez.
Norwalk plans to spend $7.6 million on new tools, equipment, vehicles, computers, and upgrades of software and information technology.
Norwalk officials were able to balance the budget without using reserves under the assumption that the city will save $550,000 in full-time salaries cost savings due to attrition.
Revenue into the city’s General Fund is projected to increase 6%, or $2.2 million, to a total amount of $49.3 million. Officials attributed this projected increase to two factors: a hike in property taxes and a rise in franchise fees.
Norwalk officials also are counting on other sources of income:
a $300,000 rebate from Southern California Edison for outfitting street lights with LED;
$457,000 in interest repayment from a former Redevelopment Agency loan;
$729,000 in loan principal repayments
$1 million from the city’s Pension Stabilization Trust Fund to be used in the future
As Norwalk’s total income is projected to increase, so is its spending, particularly in public safety.
Norwalk’s contract with the Los Angeles County Sheriff’s Department is expected to increase $523,000 from the current fiscal year, while maintaining the same number of deputies and level of service.
Other contractual agreements will increase by $388,000, not including insurance premiums, which are set to climb $203,000.
Officials cautioned that the 2019-20 spending plan could change according to ongoing labor negotiations with the city’s general and management units.
In the coming years, Norwalk will also likely grapple with increasing pension costs. According to Gomez, Norwalk paid $5.4 million towards CalPERS this current fiscal year but that number is expected to swell to $8.2 million by 2024.
“Additionally, staff prepared the city budget without knowledge of what actions the state may take that could impact local government finances,” Gomez wrote.
California’s general fund reserves is expected to reach nearly $20 billion, Gomez pointed out.
“Continued focus on building state reserves is prudent in light of economic and federal budget uncertainty and in preparation for a future recession,” Gomez said. “As prepared, it appears that there will be no state takeaways from cities.”