La Mesa Raises Executive Salaries, Cannabis Revenue Surpasses Expectations
The La Mesa City Council unanimously approved salary and benefit increases for managers as part of their budget adjustment for the fiscal year that began July 1.
The salary increases come at a time when the city is doing well financially, coming in millions of dollars above estimates for sales, property and cannabis taxes and one-time revenue streams.
Council member Bill Baber described how in the police force some sergeants were paid higher salaries than their supervising NCOs because sergeants are entitled to overtime while lieutenants are not.
That created a chilling effect for the promotion, City Manager Greg Humora said at a recent meeting. By increasing the remuneration of these management positions, there will be a clear difference in remuneration between positions with different hierarchical levels.
“We want to make sure there’s a pay gap so that sergeants are promoted to lieutenants,” Humora said.
Baber said the two police stations were not part of the police union.
Other positions also benefit from it. Department Managers of Finance, Public Works, Community Services and Community Development Get a Pay Raise, Along with Assistant General Manager, City Clerk, City Engineer, Fire Marshal and More Again.
These employees will see their salaries increased by at least 5% starting this month, with some receiving a 7% raise.
Chief Financial Officer Tammi Royales said the city’s general fund revenue was up $8.6 million more than expected. General Fund revenue for the 2022-23 fiscal year was originally estimated at $53.9 million, but staff updated the projections to $62.6 million.
A large majority of the city’s revenue comes from property and sales taxes, but Royales said cannabis businesses continue to beat revenue forecasts. The city’s cannabis business tax generated $2.3 million in the 2020-21 fiscal year, well above the $500,000 estimate.
Staff estimated a similar amount for the just-ended 2021-22 fiscal year and 2022-23 fiscal year for the city’s 10 current retail dispensaries.
However, Royales said that amount is expected to drop in the future as more cities open more cannabis businesses. These operations are currently legal in Chula Vista, La Mesa, Lemon Grove, Oceanside, San Diego and Vista, and Santee may also approve the arrival of cannabis stores in the city this year.
For the fiscal year that ended June 30, the city estimated reserves at $35.9 million.
“[Reserve funds] gives us an extra cushion against the anticipated recessionary numbers that are forecast in 2023,” Royales said. “Being fiscally responsible will help us weather any future storms that come our way.”
Expenses also increased by $2.7 million – from $60.2 million to $63 million – due to salary increases and the allocation of funds to certain projects, such as the revitalization of the village of downtown and the city’s climate action plan.
The Mesa spends the most money on police and fire departments – 62% of the city’s general fund.
The city also added a $380,000 contract for animal services with the San Diego Humane Society.
The board voted unanimously to pass the budget updates and staff salary increases with minimal discussion.