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Escondido delays CPI fee adjustment; council receives third-quarter financial report showing revenue gains
Summary
Councilors agreed to postpone a CPI-based user fee adjustment while staff collect a full year of post-fee-change data. The council also received and filed the third-quarter (ending March 31, 2025) financial status report showing revenue increases in several categories and existing reserves.
City finance staff recommended postponing an automatic consumer price index (CPI) adjustment to user fees until the city can collect a full year of data under the updated fee schedule; council members concurred. The council also received and filed the city's third-quarter financial status report for the period ending March 31, 2025.
Finance Director Christina Holmes presented background on the user-fee study and recent changes. Holmes said a consultant's 2024 review led council to move many direct-benefit fees to full cost recovery and authorized the city manager to adjust fees annually by the prior-year percentage change in the San Diego County CPI. "Because a full year of fees have not been collected under the new fee schedule, staff are recommending postponing that consumer price index adjustment of 3.1%," Holmes said; staff will return with a full-year analysis around October 2025.
Holmes then summarized the third-quarter financial results. Key points included:
- General fund operating revenues were at 64% of budget through March 2025; operating expenses were at 73%. - Sales tax, the largest general-fund revenue source (39% of budget), trended slightly below March 2024 but the city's overall revenues increased versus the prior year by approximately $6.6 million. - Property tax increased by about 3.9% (roughly $797,310) and other tax revenues rose due to franchise-fee timing and the Palomar energy plant returning to operation. - Intergovernmental revenue was up, driven in part by mutual-aid reimbursements for state deployments (about $1,038,622 recorded through March 2025). - The City's Section 115 pension trust balance was reported at $35.8 million (1-year rate of return of about 5%) and the general-fund target reserve (25% of operating revenue) was noted as roughly $33.2 million.
Council members agreed staff should postpone the CPI adjustment and return after a full year of data collection. They also received and filed the financial report.
Actions taken: council accepted staff recommendation to delay the CPI-based user-fee adjustment and received and filed the fiscal year 2024-25 third-quarter financial status report ending March 31, 2025.
