2004 AGN JUN 28 I02 - Laserfiche WebLink

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Community Services — Due to the retirement of the Community Services Director, the Recreation Manager's position was eliminated and the incumbent was promoted to the Director position. Further, effective July 1, 2004 this Department will become a Division of the Police Department. This reorganization realized a savings of approximately $124,000. Public Services — The Building Maintenance Division which previously reported to the Community Services Director will be transferred to the Public Services Department and report to the City Engineer. Due to the increase in the number of employees in this Department, policy dictates the upgrade of the Administrative Assistant to an Executive Assistant. This change along with the salary adjustment of the City Engineer due to the increased responsibilities creates an appropriation increase of approximately $10,300. General Fund The General Fund revenue estimate for FY 2004/05 is $26,795,553 and the proposed appropriations are $26,176,510 and reflect a surplus of $619,043. The city's revenues are subject to risk due to State raids on VLF (Vehicle License Fee), ERAF (Education Revenue Augmentation Fund) and Sales Tax and the ever- present prospect of an economic downturn. It must be noted that there are some major changes in the revenue make of the General Fund and they are as follows: Vehicle License Fee (VLF) — This revenue source which is estimated to generate approximately $3.0 million in the current fiscal year, is being reduced to $383,000 in the proposed budget. This revenue loss is due a budget deal negotiated with the Governor's office whereby California Cities will endure two painful years of revenue losses totaling $350 million each year. The City of Colton's share of this loss is estimated to be approximately $457,000. What the cities gain from this negotiated deal is that the Governor's strong commitment to work with local governments for passage by the legislature and the voters of an alternative constitutional amendment that would prevent further state takeaways of local revenues. The State of California has assured cities that the loss in revenue will be mitigated by the creation of a pass through identified as "Property Tax In-Lieu of VLF". This revenue source for fiscal year 2004/05 is estimated to be $2,193,000. Even with the assurances of a pass through, the City of Colton will realize a loss in revenue of approximately $400,000. In addition to this loss, it must be noted that there is an additional negative impact in "cash flow". The VLF which was remitted to cities on a monthly basis from the State of California will now be passed thorough to cities via the County along with Property Taxes in December and April of each year. Sales Tax — Due to the passage of a ballot measure in March 2004 (Triple Flip), whereby the State of California will withhold 25% of the Sales Tax due to cities and backfill a like amount through a vehicle identified as "Property Tax In-Lieu of Sales Tax". This revenue source for fiscal year 2004/05 is estimated to be approximately $1,846,000. It must be noted that there is a negative impact to the General Fund from a"cash flow" point of view. The Sales Tax which was remitted to cities on a monthly basis from the State of California will now be passed through to cities via the County along with Property Taxes in December and April of each year. Utility User Tax — With the passage of Measure W in March 2004, the residents of the City of Colton approved the collection of a Utility User Tax effective April 6, 2004 of 4% for residential customers and 6% for commercial customers on all utilities. This new revenue source is expected to generate approximately $2.9 million in fiscal year 2004/05. This new revenue source was approved with exemptions for senior citizens, low income Housing and Urban Development (HUD) guidelines, governmental agencies and non-profit organizations and has a sunset provision in June 2011.