Desert Hot Springs City Budget takes a Double Hit

A few weeks ago the city agreed that developmental fee income would not be the $2 million dollars that were originally budgeted, and that $1.1 Million is a more realistic figure. Thursday the agenda packet for Tuesday’s city council meeting brought to light another fiscal problem. Instead of finishing with a positive $200,000 to budget, the city finished last fiscal year with a $938,000 deficit. This reduced the cities reserves to $3,156,000.

The 2013-2014 budget had a built in use of $2,000,000 of reserves. The loss of the additional $900,000 from developmental fees will insure that Desert Hot Springs will have no reserve in June of next year.

The city this year has at least a $3 million dollar deficit. Next year the city will most likely have to expend general fund money to operate the Wellness Center. Growth is not likely, in the short term, to solve this problem.

The interim city manager has asked for some extraordinary powers to cut expenses immediately. But, the gap in the city’s budget appears to require either large cuts in spending or large fee/tax increases.

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