Budget revisions on hold

"At mid-year we can make recommendations for adjustments depending on whether revenues are up or down. At the same time we can give the council options because we know where they're going," Averett said.

As of June, the city's budget included $23.1 million for the current year and $23.4 million for 05-06. The operating fund totals $31 million this year followed by $31.5 million and a $6.6 million capital improvement budget.

One expected adjustment is based on SCOOT, the city's free shuttle service. The popular program costs upwards of $1 million annually, leaving the City Council searching for ways to reimburse the cost. The city plans to spend $14,500 on a resident survey to gauge interest in a parcel tax and could shell out up to $50,000 for a special election. Those expenses will cut into the general fund but a parcel tax will free up money for capital improvements like street maintenance, Averett said.

"Either way the residents will be funding transportation either through SCOOT or freeing up the gas tax. Either way you go, you're funding streets either through repair or by less trips on them because of SCOOT," Averett said.

Fiscal prudence left the city able to manage the downturn of the last years, but Averett said city officials are not assuming they will emerge unscathed.

"We went into this in very good shape and with a very good strategy but the duration is taxing us. We're in relatively good shape to weather it a couple more years but it sure would be nice to see some light at the end of the tunnel," he said.

Sales and transit occupancy taxes are bouncing back in the northern parts of the county but San Carlos remains 64 percent below its 2000 peak. Unlike other cities in the county, San Carlos' hotels draw business clientele instead of conventions or tourists. Until those industries pick up, hotels will continue to suffer as will the city, Averett said.

Even at the February review, the data collected by the city will be tenuous. Sales tax numbers can be as old as six months and won't likely reflect December sales - often the most positive quarter due to the holidays. Instead, Averett said the city must project numbers based on store owners, independent data and past history.

Officials also look beyond the borders of San Carlos to the financial happenings around the world, the nation and the state, Averett said. The city's budget is compounded by the switch to a service-oriented economy and changing demographics as well as deficit spending and defense-related economics, Averett said.

"Influences are everywhere from the international economy down to the local yogurt shop ... we need to be looking at how we're affected by everything to project our revenue picture," he said.

Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 104. What do you think of this story? Send a letter to the editor: letters@smdailyjournal.com.