Palm Springs is heading into the next fiscal year in much better financial shape than officials once predicted. But city leaders aren’t taking chances that the economy won’t take a downturn and put the city at risk.
Driving the news: The Palm Springs City Council unanimously approved a 2022-2023 overall budget at its regular meeting Thursday evening. The budget needed to be adopted before the start of the new fiscal year on Friday.
- Staff presented a balance sheet showing the city expects to start the year with a $75 million balance, then take in $188 million in projected revenue and have $226 million in possible expenditures.
- City Manager Justin Clifton promised there would also be enough money put aside to assure the city would emerge unscathed in the event of a recession.
Money in: Revenue is expected to increase by nearly $20 million due to a slight increase in tax revenue and a significant increase in the amount of grant money received. Overall, revenues are expected to increase nearly 30% over the 2021-2022 budget.
- That’s a far cry from where the city expected to be a few years ago. As the state entered a lockdown in 2020 due to the pandemic, hotels, restaurants, and retail shops were mostly vacant. City officials made the difficult decision to cut staff and curb spending in anticipation of tens of millions in lost revenue.
- Palm Springs bounced back in a big way. As pandemic restrictions eased, visitors flocked to the city eager to relax and soak up the sun. The city expects to end the 2021-2022 fiscal year with $20 million more in transient occupancy tax than it did two years ago.
Money out: Most of the public comments received Thursday evening before the budget was approved centered around pleas for the city to spend more on police and fire personnel. Next year’s budget answers those pleas by committing an average of 26.5% more money to each department.
- The city has initial plans to hire nine additional firefighter/paramedics. Just how many police officers will be added should be known after a staffing study for the police department, backed by Police Chief Andy Mills, is delivered. Following a vote on the budget, the Council approved hiring a firm to conduct that study and recommend the right balance between uniformed officers and mental health practitioners.
- “Sometimes people get to the point that they need police intervention because they didn’t have workforce development, access to a library or a clean park to play in,” said Mayor Pro Tem Grace Garner. “I’m glad that we as a Council are investing in these things, that we’re not just saying that we need more police, and that there’s balance.”
Bottom line: “This budget is a $64 million increase in the course of three years in how much we are spending. That increase is more than the total budget of the city of Palm Desert. In three years, we have added the equivalent of another city to our budget. That is a remarkable story in terms of our commitment to this community.” — Mayor Lisa Middleton