The City of Carlsbad’s proposed budget for next fiscal year invests in the City Council’s highest priorities, sets money aside for future infrastructure needs and grows the city’s cash reserves, while reducing spending to shore up the city’s long term financial health.
The proposed FY 23-24 budget, which is now available for review, reflects a call for all departments to increase efficiency and find new ways to reduce ongoing spending. In addition to lowering base spending by $2.3 million at a time when inflation is 6%, the proposed budget reduces city staffing by the equivalent of 12 positions.
Although the city remains financially healthy today, with a AAA credit rating, healthy reserves and among the lowest pension debts in the region, Carlsbad is facing new fiscal challenges as it transitions from a growing city to one focused on maintaining its high level of service. Fees from development, which have funded much of the city’s current infrastructure, decrease at this stage of life, leaving many cities seeking new sources of revenue, cutting back on services, or both. (Development revenue in the proposed budget is down 21%.) Long-term financial forecasts show the costs to maintain current levels of service will exceed projected revenues in as soon as three years.
The proposed budget maintains the city’s high level of service, which includes several programs added in recent years to address City Council priorities. These include a beach lifeguard program, a program to reduce homelessness, an additional fire station and two additional ambulances, a police ranger program for city parks and trails, increased spending on the arts, more pool lifeguards, additional parks, and enhanced efforts to protect the environment.
The proposed FY 2023-24 budget also includes added and expanded services to meet state mandates from the last several years that did not come with new funding. This includes housing laws, stricter recycling regulations, protecting water quality and managing public records.
A final area of pressure on the city’s budget is the increasing costs due to inflation and supply chain issues.
City staff will go over the preliminary budget at the May 23 City Council meeting, which is also an opportunity for community members to provide input, either by coming to the meeting and requesting to speak or emailing the City Council in advance of the meeting at clerk@carlsbadca.gov.
The city will also host a community budget workshop June 1 at the city’s Faraday Center, 1635 Faraday Ave., for those who would like to learn more about the budget, ask questions and provide input in an informal setting with city staff. The meeting will take place from 5:30 to 7:30 p.m.
The proposed budget focuses on the community’s highest priorities, which are reflected in the City Council’s 5-Year Strategic Plan, approved in 2022. They are:
- Maintain Carlsbad’s unique community character and connectedness
- Prioritize the safety and well-being of the community
- Protect the environment and natural resources
- Foster a healthy local economy
- Be a model for effective and efficient local government
The city operates on a fiscal year that goes from July 1 to June 30. The final city budget is scheduled to be approved during a public hearing June 13.
At a glance*
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Proposed Operating Budget
The General Fund operating budget pays for most day-to-day city services.
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$211.5 million
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Projected revenues
The city’s budget is balanced with a surplus of $500,000.
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$212.0 million
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New savings
Because the city has forecasted that ongoing spending will exceed ongoing revenues in the next few years, this year’s budget scales back custodial services, nonessential parks maintenance, printing and other administrative expenses, travel and training for city staff, and city cell phone use, among other things expected to have a minimal impact on the community.
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$2.3 million
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Proposed staff reductions
To help reduce ongoing spending as much as possible, several departments have eliminated or consolidated positions to reduce the total number of full-time equivalent positions.
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- 12.06
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Projected reserves
The General Fund reserve is like a rainy-day fund to help maintain city services during an emergency or help bridge economic downturns. The City Council’s policy is to always have the equivalent of 40% of one year’s budget in reserve. The projected amount at the end of the FY 24 is 59%. Since 2019, several new City Council policies and a new approach to developing the city’s budget have resulted in the city’s General Fund reserve growing by 43%.
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$118.4 million
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Pension funding
The pension funding ratio refers to the size of a city’s pension obligation (what is owed to retirees) compared to the money it has paid into the pension fund. Carlsbad is in the top three in the county for pension funding.
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86% (goal is 80%)
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* all figures refer to the city’s General Fund
