City of Fontana is staying on solid financial footing, according to new report | News



Many people are concerned about the state of the economy because of various factors, including inflation, rising interest rates, and the recent difficulties experienced by some banks.

But at the City of Fontana, the financial picture looks good and is anticipated to stay positive in the years to come, according to a recent analysis.

In her Fiscal Year 2022-23 midyear budget report, Chief Financial Officer Jessica Brown said the city’s total year-end revenues will exceed the budget by $5.3 million.

There are three main reasons for this, Brown told the City Council during a recent meeting:

• Sales tax revenues in Fontana are trending nearly $4 million above the initially budgeted amount, a 5 percent increase from the previous year;

• Property tax revenues are $2.6 million above budget, a 9 percent rise over the previous year;

• Business related revenues, such as business licenses, are seeing a 1.8 percent increase.

These increases make up for a decline in revenues for the development related budget, which are coming in under $3 million.

The General Fund will benefit from the Police Department and Community Services Department spending less than their budgeted amount, saving the city millions of dollars. The city also is maintaining a healthy reserve fund, Brown said.

—– IN ADDITION, Brown compiled a five-year General Fund forecast which indicated that the city is faring well, even though expenditures will eventually be outpacing revenues over the long term.

“Overall, the city’s revenues are projected to be stable,” Brown said. “We are projecting a slight slowdown in growth, but at this time, even local economists are not projecting a recession, per se.”

The city is expected to see a 3.6 percent revenue growth rate for the next fiscal year and between 3.3 and 3.6 percent during the next four years, she said.

She predicted that:

• Sales tax revenue will grow from $59.6 million in 2022-23 to $68.9 million by 2027-28;

• Property tax will grow from $36.1 million to $45.9 million in 2027-28.

However, expenditures will grow 6.0 percent next year and about 5.0 percent overall during next five years, Brown said.

The Police Department budget will rise from $72 million to $96 million, and the Community Services Department budget will go from $12 million to $18 million.

“So next year looks great. We’re expected to come in at $12 million over expenditures,” Brown said. “However, if you go five years out, it’s only $5.6 million — a still great position to be in. However, if we took the full $12 million and we programmed it as ongoing expenses in the next fiscal year, in the following fiscal years we will find ourselves with a deficit. We won’t be able to fund ongoing expenditures of $12 million in years 2, 3, 4, and 5. So what we need to focus on is to use this as a tool to say, what is our capacity for ongoing expenditures currently?”

Members of the City Council said they appreciated Brown’s report, and Mayor Acquanetta Warren said the community is “blessed” because the city has been able to stay financially healthy during the COVID-19 pandemic over the past three years while some other cities have faced major difficulties.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *