Revenue increase allocated to public safety improvements

From left: City manager Armando Villa, council member Dean Deines and Mayor Pro Tem Greg August during Wednesday's City Council meeting. Menifee 24/7 photo: Kristen Spoon

By Doug Spoon, Editor

City of Menifee revenue and expenditure savings for the first half of the fiscal year was approximately $5 million more than expected, and Measure DD tax revenue exceeded budget projections by about $1.4 million.

Those figures were included in a mid-year budget review presented to the City Council Wednesday night by Wendy Preece, acting finance director. In her report, Preece attributed the increase to "a healthy local economy sparked by new development (residential and commercial) and frugal, fiscally responsible initiatives in management..."

Sales tax, property tax and permit fees paid by developers represent the revenue sources that are projected to have the highest increases among city revenue sources by the end of the fiscal year, according to Preece's report. The development surge in Menifee and the increase in consumer spending are evident in those increases.

Total revenue from development permit fees were more than 65 percent of the original budgeted amount of $10.3 million for the entire year. The projection now is to finish the fiscal year with about $11.9 million in that budget category. Meanwhile, total sales tax revenue was estimated to be $885,105 over the original budget.

At the same time, expected and/or proposed expenditures continue to increase as city officials address the need for road improvements and funding for the creation of the city's own police department, plus additional staff required to address the increasing demand for services.

In response, the City Council Wednesday night unanimously approved several expenditures of the extra funds to address these issues.

Expenditures approved from the general fund:

-- $2.8 million to be placed in a reserve account to help fund start-up costs for the new city police department.

-- A $700,000 payoff of the city's PERS retirement unfunded liability, which will save in interest currently being paid in annual payments.

-- $250,000 for the purchase of additional cyber security at the new city hall, ensuring that the city's computer system is 100 percent protected from cyber attacks.

-- $216,000 in ongoing payments for additional staff positions, including a senior planner, senior building inspector and three associate engineers.

A $250,000 allocation will increase cyber security in the new city hall. Menifee 24/7 photo: Doug Spoon

Expenditures approved from the Measure DD sales tax increase:

-- $600,000 for the purchase of road safety equipment, including a tractor with a blade for the grading and maintenance of Menifee's many dirt roads.

-- An allocation of $802,000 for half the purchase price of a ladder truck for the fire department. The other half will be budgeted in the following year.

Council member Matt Liesemeyer said he was pleased that the surplus revenue was available now to address public safety costs, but that this should not create the impression that Menifee will always have that luxury.

"This year we're projecting $11.1 million in development fees," Liesemeyer said. "Development fees are up right now because development is booming in our city. But that money's not always going to be there. That money kind of goes with the economy.

"You're talking about a pot of money that wont be here when the economy slows down. For me, it's important for people to understand that although it looks like we're making a bunch of money on development, we're not."

Preece agreed.

"Our development revenue has increased since day one in 2008, and we've never quite slowed like everyone else," she said. "It has continued to increase, but those revenues will not always be there."

Preece said that an increase in developer fees also means an increase in staff payroll to process those development plans.

"The development fees pay for our development staff," she said. "The more work they have, the more revenue we have in order to pay for it."

Preece broke down the approximate $5 million in budget surplus this way:

-- $2.7 million in increased revenue from taxes and developer fees.

-- $2.2 million in expenditure savings, resulting from unfilled positions in city contracts with the Fire Department and Sheriff's Department.

Most of the discussion before the council vote was taken centered around a request by Mayor Pro Tem Greg August that part of the proposed Measure DD expenditures be reallocated to funding of a raised portion of Bradley Road over Salt Creek. Flooding sometimes forces closure of that important traffic route between the Sun City community and the downtown portion of Menifee.

A plan for that "bridge" is in the works, but it lacks most of the funding for the estimated $10-12 million cost.

A rainstorm this week slowed traffic on Bradley Road where it crosses Salt Creek. Menifee 24/7 photo: Doug Spoon

August proposed allocating $250,000 of the Measure DD surplus funds to a reserve account, designating a similar allocation each year to eventually help fund the bridge.

"At 250,000 a year, it will take a while to get there, but I believe we need to put the Bradley bridge project into the DD budget every year," August said. "This project keeps going down in priority. It's a public safety issue that should not continue to be pushed down."

Other council members favored city staff's recommendations.

"I've seen the dirt roads when it rains," said council member Dean Deines. "They are as hard to access as anything. I recommend we revisit this (Bradley Road) at the end of the fiscal year and see how much we have to spend then. This [staff recommendation] addresses the immediate needs."

"What would we give up for this? I'm not saying anything is more important, but we've had a lot of rain -- more than usual," said council member Lesa Sobek, referring to the unusual amount of flooding of Bradley Road a few weeks ago.

A resident speaking about the public safety of dirt roads in Menifee said he lives on a dirt road south of Holland Road and west of Murrieta Road. He has been to the council before, saying that with no city maintenance of his road, he and a neighbor use personal tractors to smooth out the surface.

Tony Ulloa, recently hired as the city's public works manager over streets, is in the process of surveying road improvement needs and is developing a policy for improvement of unpaved roads. He told the council that he estimates there are at least 50 miles of unpaved roads in Menifee.

City Manager Armando Villa told council members he would put the Bradley Road project "at the top of the list" in a budget workshop in April and that he is "sure we can find $250,000 for that project for the next fiscal year."

After considerable discussion, August said, "I'm going to let this go for tonight, but I want this to become higher priority." He then joined in the unanimous approval of staff's recommendations.

Road safety equipment approved Wednesday will help improve dirt roads such as Nancy Lane, seen here after rains this week. Menifee 24/7 photo: Doug Spoon