HomeMy WebLinkAboutOB 5 DRAFT BUDGET 08-05-91OLD BUSINESS NO. 5
8-5-91
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ATE: AUGUST 1, 1991
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: WILLIAM A. HUSTON, CITY MANAGER
SUBJECT: 1991-92 DRAFT BUDGET
RECOMMENDATION:
That the City Council set August 19, 1991 as the date for a public
hearing on adoption of the 1991-92 budget for all funds.
DISCUSSION:
The City Council has conducted three workshops on the draft 1991-92
budget. Due to the uncertainty about the State budget and its impact on
the City's budget, the City Council decided to defer action on the City
budget. The State has adopted its budget and staff is now able to
identify the impact of the State budget on the City's general fund. The
only outstanding issues at the State level affecting the City's budget
are the jail booking fee and property tax collection fee. It had been
anticipated that the Governor and Legislature would support repeal of
these fees through the State budget process. Unfortunately, they
decided to defer any action until the Legislature reconvenes this month.
The State League of California Cities is hopeful that these fees will be
repealed, but, there is no reason to assume that this will happen.
The adopted State budget causes an additional net reduction of $108,000
in General Fund revenue. The reduction is derived from:
■ Loss of 47% of the
City's cigarette tax
subvention
■ Loss of one-half of the
City's non -parking fines
■ Increase in sales tax due to
extension of sales tax to
snack foods, newspapers, etc.
NET LOSS
$ ( 65,000)
( 243,000)
200,000
$ 108,000
City Council
August 1, 1991
Page two
The loss of $308,000 in fine and cigarette tax income will be allocated
back to the County for the funding of trial courts. The projected
increase in sales tax is based on the City's estimated share of the
anticipated amount to be collected State-wide. There is no way to
project the City's share of the increased sales tax other than using a
ratio of sales tax currently collected by the City to total sales tax
collected State-wide and applying the ratio to the projected sales tax
amount State-wide for snack food, newspapers, etc.
When the jail booking fee and property tax collection fee (included as
expenses in the draft budget) are taken into account, the State has
taken $408,000 in City general fund revenue to fund State and County
services.
Listed below is a summary showing the impact of the State budget and
other revisions to the projected 1991-92 General Fund balance:
■ Draft 1991-92 budget projected
$ 31627,754
6-30-92 balance
■ Add 1990-91 revised expenses
195,000
and revenues
■ Add 1991-92 reimbursement to
134,000
City from Great Western
Reclamation (recycling program)
■ Deduct loss of 1991-92 cigarette
( 65,000)
tax subvention
■ Deduct loss of 1991-92 fine
(243,000)
revenue
■ Add 1991-92 sales tax revenue
200,000
(snack food, newspapers, etc.)
■ Revised 6-30-92 General Fund $ 31848,754
balance
The increase in the projected fund balance is due to adjustments for
non-recurring revenue being higher than recurring revenue. As pointed
out above, due to the State budget, projected General Fund recurring
revenue is $108,000 less than shown in the draft budget. With the above
adjustments, the draft 1991-92 General Fund budget remains balanced
(projected recurring revenue exceeds budgeted recurring expenditures by
approximately $42,000). The projected fund balance exceeds the 15%
reserve policy established by the City Council.
City Council
August 1, 1991
Page three
Except for allocating funds for any additional one-time (non-recurring)
expenses, it is my recommendation that consideration of any adjustments
to draft 1991-92 General Fund budget be deferred until the mid -year
budget review. This will put the City Council in the position of
knowing whether the jail booking fee and property tax collection fee
will be repealed (saving the City $300,000) and having six months of
information on expenses and revenues.
Based upon the budget workshops to date, the following are items which
require a decision by the City Council concerning funding:
■ Consolidated Transportation Agency $ 11840
(supplemental to the $5,455 included
in draft budget)
■ Feedback Foundation 18,917
(senior meals program)
■ Community groups Unknown
(The City Council allocated
$ 34,000 in 1990-91)
■ Southwest Neighborhood Improvement To be determined
Program - special programs
The Consolidated Transportation Agency and Feedback Foundation
presumably will attend the public hearing on the budget to speak to
their requests. As a matter of policy, the City Council has allocated
a fixed amount of funds for community groups and then appointed a
committee to recommend how the funds should be distributed. If the City
Council decides to appropriate funds for the Consolidated Transportation
Agency, Feedback Foundation and/or community groups, I would recommend
that General Fund reserves be used with the understanding that non-
recurring revenue is being used. This would establish as a matter of
City Council policy that these groups should not expect that City
funding will automatically be available each year.
With regard to the Southwest Neighborhood Improvement Program, the draft
budget includes a substantial commitment of funds in the form of
personnel costs (police, public works and community development). Staff
will be submitting a recommendation to the City Council at a later date
concerning supplemental funding for any special programs (youth sports,
child care, etc).
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