Thanks to a stronger than anticipated economic rebound and careful spending, the City of Carlsbad ended the 2020-21 fiscal year with a more than $15 million surplus. The City Council has allocated these funds to several immediate projects addressing community priorities, saving for major projects coming up in the next few years, and managing the city’s long term pension costs.
According to the city’s Finance Director Ryan Green, ending the year with unspent money is not unusual, because cities may not spend more than has been budgeted. In Carlsbad’s case, one reason the amount of surplus budget is higher than anticipated is because staff intentionally used conservative estimates, not knowing how the ongoing COVID-19 pandemic would affect the economy and city services.
Based on a City Council policy, staff presented several options for what to do with $15.6 million left over at the end to the city’s fiscal year – June 30, 2021. The City Council voted Sept. 28 to take the following actions:
Make a $6.4 million additional discretionary payment to CalPERS, the city’s retirement system, which will save money in interest payments over the long term.
Transfer $7.6 million to a fund to help pay for the construction of several planned projects.
Continue projects that were originally planned for last fiscal year but not completed or postponed due to economic uncertainty.
Another City Council policy sets a goal of maintaining a reserve account equal to at least 40% of one year’s worth of spending on day-to-day city services. This is one way the city has historically been able to save up money and pay cash for large projects, avoiding interest payments on loans or bonds.
Several large projects have been discussed in recent years, including the Monroe Street Pool refurbishment, a new fire station west of I-5, lowering the railroad tracks below street level through the Village and Barrio, and reconfiguring Carlsbad Boulevard south of Palomar Airport Road to create more space along the coast for biking and walking trails, recreation and gathering. A city law requires voter approval to spend more than $1 million of general fund money on large projects like these, even if the city has the money saved up.
