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City officials project solid bottom line

Surpluses expected and pension costs 'under control,' officials say.

April 20, 2011|By Joe Piasecki, joe.piasecki@latimes.com

Many other government agencies continue to grapple with recession-driven budget deficits, but La Cañada Flintridge is looking forward to a sturdy bottom line over the next five years.

City Finance Director Daniel Jordan told council members during their mid-year budget review last week to expect narrow budget surpluses in all but one of the next five fiscal years.

While he cautioned that city officials may have to tap up to $32,000 of city’s $14 million in reserves to balance the books in fiscal year 2013-14, Jordan projected a surplus of more than $300,000 in 2015-16.

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But with state finances in flux pending the fate of proposed tax extension ballot measures, Mayor Dave Spence said city leaders will remain cautious in their optimism.

“Our budget outlook is positive, but we need to take a guarded attitude toward the state government regarding what they might take away and how they try to balance their budget on the backs of local government,” Spence said.

Jordan’s financial projects see property tax revenue climbing gradually over the next five years to remain in pace with city expenditures.

These costs include employee salaries and retirement costs, which Jordan expects to increase only moderately.

Unlike other government agencies, especially those in the immense state bureaucracy, employee pension costs represent only a small portion of the city’s budget.

This fiscal year, city contributions to the state employee retirement system (CalPERS) will amount to $431,835, or about 3.58% of the city’s $12,133,400 general fund budget, said Jordan.

Next fiscal year, the city’s pension obligation will increase to $476,483, or 4.2% of that year’s total budget.

Pension costs will rise to nearly $596,581 in 2015-16, or about 4.7% of that year’s expected budget.

“It’s always a concern of ours, but as usual, La Cañada Flintridge has been more conservative than most cities,” said Councilman Donald Voss. He said the city’s pension costs “are relatively under control, and that hasn’t always been true of other agencies,” he said.

Because La Cañada Flintridge contracts with the county for police, firefighting and public works services rather than maintaining its own agencies, there are only 24 full-time employees at City Hall.

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