The San Diego expects to end the present fiscal year with a $7.6 million surplus in the coffers of its general fund, according to a report released by the mayor’s office on Friday.

The difference between red and black will be determined by slightly higher than projected revenues and slightly lower expenses, according to the mayor’s report. The general fund pays for services like the police and fire department, as well as other services such as public libraries.

San Diego Mayor Kevin Faulconer has suggested using about $5.8 million of the anticipated surplus to bolster the city’s Public Liability Fund, which pays for legal expenses.

The move is apt, as Southern California counties have had to bear the costs of record-breaking legal settlements in recent years. In 2014, Los Angeles County Sherriff’s Department paid out a record $43 million in legal fees and settlements. Faulconer recommended that the remaining $50 million of the surplus be set aside for unexpected expenses and expansions to city services. The expected improvements will include longer hours at public swimming pools, new streetlights and faster cleaning of clogged drainage channels. More money for sidewalks, parks and trees are also on the agenda.

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Faulconer warned that San Diego will likely be confronted by extra costs because of El Nino storm conditions and greater-than-expected pension payments in the coming year. The mayor said that putting money into maintaining the improvements to the city’s services while preparing for added costs represents the most fiscally responsible approach to the surplus.

The report by the mayor’s office was based on six months of financial data, including projections of planned spending and trends in revenue streams for the remainder of the current fiscal year, which ends on June 30.

The conclusion of the budgetary report is that a moderately improving economy on the national and county level was responsible for the moderate surplus seen this year. Despite the positives, other economic indicators have slowed down. Revenue from property taxes came in at 1.1 percent less than the city’s accountants expects, and sales tax revenues were down 0.5 percent. The less than expected sales tax revenue was due principally to much lower than normal gas prices, according to the city’s analysts.

While lower gas prices mean less sales tax revenues, they also translate to savings for the city. The report estimates that San Diego will save about $3.8 million on fuel costs for its fleet of police, fire and other public service vehicles.

Tourism and bed taxes were the highlight of the report. Revenues from hotel room taxes were projected to be 3.8 percent higher than normal this year. Alongside lower fuel costs, the city’s water conservation plan also seems to be paying off. The San Diego Parks and Recreation Department is projected to save about $3.5 million on water this year, according to a report that will be presented to the City Council in the coming months.

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(all data current as of 10/19/2017)

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