Mostly bad news for new budget outlook
With a majority of City Council seats at stake in the Nov. 6 election, expect large doses of politics in upcoming weeks to impact decisions on municipal issues, including police services, higher densities for low-cost housing and a new budget to take effect July 1.
This week, let’s take a look at the city’s budget troubles for the 2012-13 fiscal year, since already the five council incumbents are wrestling with efforts to put into place a spending plan that preserves a $38 million pile of cash saved from better economic times.
First, the bad news: one large revenue stream--lease payments for a 32-acre city-owned site for a planned Friends Christian High School--is in danger. School officials missed the January payment, which was rolled over so that two payments came due this month.
March went by without school officials returning to the council with proposed changes in lease terms that they said would allow them to obtain the additional cash from donors and financial institutions needed to pay for the ground lease as well as construction costs.
Total payments to the city January through June this year was to be $420,000, with $840,000, plus a consumer price index increase, due during the 2012-13 fiscal year.
Another uncertainty is whether the council, as successor body to the Redevelopment Agency, “will be able to continue contributing for the salaries and benefits of city employees performing work related to the former agency....” a city report stated.
These costs are estimated at $355,000 for February through June this year, with more than $860,000 projected for 2012-13. In past years, the amounts were paid from cash collected by the Redevelopment Agency from increased project area property taxes.
The potential shortfalls, $775,000 this fiscal year and $1.7 million next year, are in addition to an estimated $1.2 million in general fund dollars needed to supplement revenue collected through the citywide arterial landscape district for ongoing costs.
Also this fiscal year, the city will pay $80,000 more than anticipated for claims and judgments and $220,000 to handle an increased number of lawsuits against the city.
Second, the good news: the city’s general fund ended the 2010-11 fiscal year better than expected, spending only $1.1 million instead of an anticipated $1.4 million from reserves.
By June 30, the city expects to spend $2.5 million more from reserves, leaving a projected $38.8 million “available for use,” about 139 percent of the city’s annual operating expense.
Meanwhile, for the first six months of the current fiscal year, the city’s two largest income sources--property tax and sales tax revenues--met projections, according to figures offered at a March 20 council meeting by Finance Director Dave Christian.
Finally, council turned down potential income by refusing to sign a “snitch” agreement with the state Franchise Tax Board allowing a city-state exchange of names of business license holders and names of businesses filing tax returns, which could have increased city revenue by identifying scofflaws who dodge city business license fees.
This week, let’s take a look at the city’s budget troubles for the 2012-13 fiscal year, since already the five council incumbents are wrestling with efforts to put into place a spending plan that preserves a $38 million pile of cash saved from better economic times.
First, the bad news: one large revenue stream--lease payments for a 32-acre city-owned site for a planned Friends Christian High School--is in danger. School officials missed the January payment, which was rolled over so that two payments came due this month.
March went by without school officials returning to the council with proposed changes in lease terms that they said would allow them to obtain the additional cash from donors and financial institutions needed to pay for the ground lease as well as construction costs.
Total payments to the city January through June this year was to be $420,000, with $840,000, plus a consumer price index increase, due during the 2012-13 fiscal year.
Another uncertainty is whether the council, as successor body to the Redevelopment Agency, “will be able to continue contributing for the salaries and benefits of city employees performing work related to the former agency....” a city report stated.
These costs are estimated at $355,000 for February through June this year, with more than $860,000 projected for 2012-13. In past years, the amounts were paid from cash collected by the Redevelopment Agency from increased project area property taxes.
The potential shortfalls, $775,000 this fiscal year and $1.7 million next year, are in addition to an estimated $1.2 million in general fund dollars needed to supplement revenue collected through the citywide arterial landscape district for ongoing costs.
Also this fiscal year, the city will pay $80,000 more than anticipated for claims and judgments and $220,000 to handle an increased number of lawsuits against the city.
Second, the good news: the city’s general fund ended the 2010-11 fiscal year better than expected, spending only $1.1 million instead of an anticipated $1.4 million from reserves.
By June 30, the city expects to spend $2.5 million more from reserves, leaving a projected $38.8 million “available for use,” about 139 percent of the city’s annual operating expense.
Meanwhile, for the first six months of the current fiscal year, the city’s two largest income sources--property tax and sales tax revenues--met projections, according to figures offered at a March 20 council meeting by Finance Director Dave Christian.
Finally, council turned down potential income by refusing to sign a “snitch” agreement with the state Franchise Tax Board allowing a city-state exchange of names of business license holders and names of businesses filing tax returns, which could have increased city revenue by identifying scofflaws who dodge city business license fees.
posted by Jim Drummond at 12:00 AM
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