City adjusts budget with $3.54 million more revenue expected

By Doug Spoon, Editor

Higher than expected sales tax revenue and development fee revenue during the last several months of the COVID-19 pandemic have prompted City of Menifee officials to make mid-year adjustments that add $3.54 million to the city’s annual budget.

The projected revenue will allow the city to increase projected expenditures by $1.84 million and still have a $1.7 million net increase to the general fund, said Wendy Preece, the city’s deputy finance director, in a mid-year budget adjustment that was approved by the City Council last Wednesday.

Preece reported that from March to June of 2020 – the initial stages of the pandemic – sales tax in the city decreased by 11.7 percent and development fees decreased by 9.24 percent. But from July to December 2020, sales tax increased by 9.27 percent and development fees increased by 20.73 percent. As a result, the revised projected general fund balance for the current fiscal year is $50.4 million.

“Who would’ve known that development and residential would do so well during a pandemic?” Mayor Bill Zimmerman stated in thanking staff for the presentation.

City officials attribute some of the unexpected increase in revenue to efforts by city staff to assist local businesses by awarding federal grant incentives,and creating other incentive programs, resulting in renewed retail sales. Continued projects resulting in developer fees paid to the city has also contributed to the increase.

This, they said, is why they are able to add funds to the city’s $16 million Capital Improvement Projects budget and add 17 staff positions to the payroll. These include nine positions that were frozen previously and eight new positions.

The unfrozen positions are:

-- Two building inspectors
-- One building permit technician
-- One code enforcement technician
-- One code enforcement supervisor
-- One marketing assistant
-- Two public works inspectors
-- One cashier

The new positions approved by the council are:

-- Two street maintenance workers, class II
-- One street maintenance worker, class I
-- One AV technician
-- One media specialist
-- One associate engineer for CIP
-- One park/landscape maintenance II position
-- One park/landscape attendant

That brings the total number of city staff positions to 240. By comparison, the presentation reported that Murrieta – a neighboring city with similar population – has 312 employees.

“Everyone has been impacted by COVID,” said Margarita Cornejo, finance services manager, who took part in the presentation. “But we can say today that the current economic outlook for the city is positive. We are seeing a recognized increase in retail sales, expanding development and property valuations.

“Our main revenue resources indicate to us we are in a good, strong and healthy position to take on these recommendations.”