NORWALK — An unexpected increase in revenues has boosted this city's income by $400,000, which will be used to offset overspending by the City Council.
The projected bonus--which the city expects to receive by the end of June--will mostly come from an increase in building permit and vehicle registration fees. The extra funds were earmarked by the council last week to pay for $389,000 in unbudgeted expenditures that were approved between July and December.
The unanticipated boost proved to be good news for several Southeast social service agencies as well, who will continue to be funded by the city through July 1.
The city had threatened to cut off funding halfway through the fiscal year because its share of revenue sharing funds dwindled by $32,000. Altogether, 16 agencies--which provide services ranging from drug abuse counseling to services for the blind--were allocated $77,000 for the entire year.
"I think we're on target. Right now, we're in the black," Councilman Marcial (Rod) Rodriguez said in an interview.
The council on Monday delayed action on a proposal to fund most of the social service agencies with federal community block grant funds for next fiscal year, which begins July 1. This year is the last in which the city receives federal revenue sharing funds, which were abolished in October.
The block grants--which this year amounted to more than $1 million--have traditionally been used for home and business improvements. City Administrator Richard Streng said the city may reallocate some of that money to contribute to the agencies.
However, not all of the agencies may be funded because the guidelines for block grant funds state that agencies must provide a direct benefit to low-income persons. A staff report said four agencies--We TIP, Lunch With a Friend, Friends of the Library and Alondra Library--would not be eligible under those criteria.
Projects Squeeze Budget
The council found itself in a tight spot after spending almost $500,000 that was not budgeted for projects such as a baseball field at Gerdes Park and an engineering study to construct sound walls along sections of the Santa Ana Freeway.
City Controller Wiley Jung warned the council last month of the expenditures, which prompted the council to hold back spending and possibly delay projects to balance its budget.
But after adding up figures for November and December, Jung said he found that the city received $100,000 in building permit fees that was not included in budget projections. He said he expects permit fees to raise an additional $100,000. Fees for car registration are also expected to go up by $200,000 from last year's figures, he said.
"More revenue came in than we expected," Jung said. He added that there are further reductions in the projected $500,000 deficit because certain projects turned out to be less costly than anticipated.
The city will review the budget again in March, and if expected revenues fall short, may consider delaying one or more capital improvement projects already budgeted.
The council also approved a change to help keep spending in check. Whenever an unbudgeted request is received by the city, it will be referred to a city commission dealing with that topic for a recommendation before coming before the council for action.
The council rejected a suggestion to form a budget review committee--made up of the mayor, the city administrator and the city controller--to go over each request and send a recommendation to the council.
Rodriguez said the council felt a committee would be unnecessary since the council is able to police its own spending. He also said the council may still approve more unbudgeted requests, since the city could end up with as much as a $500,000 surplus by the end of June.
"We'll take them as they come," he said.
But Councilwoman Grace Napolitano said that despite the surplus, the council should sharply curtail spending in areas such as council travel to avoid a shortfall in the future.
"All I'm saying is, OK, we had a warning. There is a danger of doing it again," Napolitano said in an interview.