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INTRODUCTION
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BUDGET SUMMARY
The 1988/89 General Fund budget respectfully submitted
accordance with the direction given by the Mayor and
items addressed by the 1988/89 recommended budget are:
l. Balanced budget Only 1988/89 estimated resources exclusive of
reserves are applied to 1988/89 estimated expenditures.
was prepared in
Council. The
2. Building Reserves The 1988/89 General Fund estimated beginning
fund balance of $l,128,883 is for the most part untouched in the
recommended budget. This provides a base for future reserve
building efforts.
3. Equipment Replacement - As a result of equipment purchases being
deferred in prior years the City is in need of equipment. The 6
year lease purchasing method recommended in the 1988/89 budget
allows the City to have use of $2,215,450 of equipment for
$1,167,108 of first year costs.
4. Capital Projects - This recommended budget includes a proposed
increase of $119,968 over the prior year's budget of $70,980. The
different amount on Chart.l represents committed projects from
prior budget years.
5. Expanded Programs The amount of $112,000 is proposed for
personnel in the Code Enforcement and Public Buildings areas.
Other department proposed expanded programs will be deferred for
review by Ways and Means. This was done to allow the Ways and
Means Committee to evaluate the validity of each expanded program's
proposed revenue resources and use of those resources independently
of the more regular and stable budget activity.
GENERAL OVERVIEW OF RESOURCES AND USES OF RESOURCES
Resources
There are three types of resources, excluding reserves, available for
General Fund expenditures. These are:
Direct Revenues
Transfers from other funds
Departmental credits
Direct Revenues are revenues recorded in the General Fund.
Transfers from other funds are revenues that are required to first be
recorded in separate funds for accountability.
Departmental
performed by
credits are of course in-house charges for services
various departments. The resource aspect of Departmental
Credits comes into play when other funds or agencies are charged, such
as the Refuse fund or the Redevelopment and Water agencies.
The budgeted 1987/88 General Fund revenues were $51,729,684. This
amount was revised at mid year to $51,631,941 which represents a .19%
decrease. The estimated 1988/89 General Fund revenues are $57,191,987,
a 10.7% increase over the revised 1987/88 estimate.
MAJOR GENERAL FUND SOURCES FOR REVENUE
FOUR LARGEST
Sales Tax
Sales Tax revenues are received from the state quarterly. The City
receives 1 cent of the 6 cents state tax. Sales Tax represents the
largest single revenue source in the General Fund. The 1987/88
estimated amount was revised at mid year from $18,981,749 to
$18,952,750. The estimate for 1988/89 is $20,180,935 which is a 6.4'
increase over the 1987/88 revised estimate. In April 1987, the City
contracted with Municipal Resource Consultants (MRC) to perform the
sales tax audit. The purpose of this audit was to help ensure the
correct crediting of sales tax to the City. MRC charges the City 25'
of additional sales tax revenues and a $9000 annual fee for its
services. MRC's preliminary audit was concluded in February 1988. The
audit indicates that the City will receive from $50,000 to $100,000 in
misallocated sales tax beginning in the 1988/89 fiscal year. This
estimate has been incorporated into the 1988/89 estimate. For 1988/89
the State estimates that there will be a 6' increase in sales tax
revenues over 1987/88.
The 1987/88 fourth quarter sales tax allotment will not
until July or August, however, based upon a combination of
information received from MRC and the State of California
years experience I feel that the 1988/89 sales tax revenue
very realistic.
Uti1itv Tax
Utility Users Tax is the second largest revenue source in the General
Fund. The 1988/89 estimate of $11,062,000 is up 8.4' over the 1987/88
revised estimate of $10,200,000. This revenue is generated by an eight
(8)' tax on all utilities used within the City limits. An increase of
l' of the utility users tax prOduces approximately $1 million in
revenue.
be received
reports and
and prior
estimate is
Prooertv Tax
Property Tax revenues for 1988/89 estimate of $7,437,000 which makes it
the third largest revenue source. The 1988/89 estimate is 1.1' over
the 1987/88 revised estimate. The City's share of the property taxes
collected by the County is approximately 25 cents per $100 of assessed
valuation within City limits. The assessed valuation for the 1987/88
fiscal year is $2,624,474,029.
Motor Vehicle In Lieu
rhe fourth largest General Fund revenue source is Motor Vehicle in
Lieu. The 1988/89 estimate of $4,857,360 is 10.4% over the 1987/88
revised estimate. This revenue is received from the State and is based
upon population. The State distributes this revenue in lieu of local
personal property taxes. The latest population figure of 1148,370 was
used in determining this estimate.
Uses of Resources
There are two forms of resource use in the recommended 1988/89 budget.
These are:
Direct Expenditures
Transfers To Other Funds
Direct Expenditures like Direct Revenues are recorded in the General
Fund.
Transfers to other funds are monies transferred to other funds to
subsidize their operation. Examples of this are the Library and Animal
Control Funds.
MAJOR USE OF RESOURCES
Personal Services
The single largest use of General Fund resources (81% of total) is
Personal Services. The 1988/89 estimate amount is $44,991,730 which is
22% over the 1987/88 revised estimate. The City has increased
personnel for the past 6 years even though a hiring freeze was in
existence. This in addition to various salary adjustments and the loss
of federal revenue sharing monies used to offset personal services has
contributed to the lack of General Fund reserves.
CONCLUSION
In conclusion, we believe that based upon the factors previously
mentioned the revenue estimate of $57,191,987 is sound. We would urge
the Mayor and Council to keep this in mind while reviewing the 1988/89
recommended budget.
REVENUE COMPARISON REPORT
-------------------------
GENERAL FUND REVENUES - BY CATEGORY
PROPERTY TAXES
OTHER TA)(ES
LICENSES AND PERMITS
FINES & PENALT1ES
USE OF MONEY & PROPERTY
INTERGOVERNMENTAL
CURRENT SERVICES
MISCELLANEOUS
REVISED
ESTIMATE ESTIMATE ESTIMATE 37-88/88-89
1987-38 1987-83 1 't88 -89 % CHANGE
----------- ----------- ----------- -----------
7,060,000 7,355,000 l,437,000 1 . 11
31,772,076 31,468,700 33,748,335 7.24
3,620,903 3,343,040 5,069,976 31.75
258,000 254,440 253,000 1.39
761,210 871,047 913,547 4.87
5,757,432 5,486,269 6,036,433 10.02
1,673,663 1,422,982 2,362,546 66.02
821,:350 925,463 1,365,600 47.55
----------- ----------- ----------- -----------
51,729,634 51,631,941 57,191,987 10.76
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
GENERAL FUND REVENUES - BY MAJOR SOURCE
RE:VISED
ESTIMATE ESTIMATE ESTIMATE 37-38/83-8't
1987-83 1987-88 1988-89 % CHANGE
----------- ----------- ----------- -----------
SALES TAX 18,931,749 18,952,750 20,180,935 6.48
UTI Ll TY USERS TAX 10,382,250 10,200,000 11,062,000 8.45
PROPERTY TAX 7,060,000 7,355,000 7,437,000 1.11
MOTOR V!HI CLE IN LIEU 4,676,253 4,398,777 4,857,360 10.42
BUSINESS LI CENSES 2,443,188 2,450,000 2,695,000 10.00
FRANCHISES 1,178,077 1 , 1 :35 , 9~, 0 1,265,950 11.44
TRANSIENT OCCUPANCY TA}{ 1,060,000 1,000,000 1,050,000 5.oel
DEVELOPMENT FEES 671,294 571,177 1,211,678 112.13
OTHER 5,276,873 5,568,Z::c7 7,432,064 33.47
----------- ----------- ----------- -----------
51,729,684 51,e.31,'?41 57,191,987 10.76
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
EXPENDITURE COMPARISON REPORT
-----------------------------
GENERAL FUND EXPENDITURES - BY FUNCTION
52,027,239
REVISED
ESTI MA TE ESTIMATE 87/88-88/89
1987/88 1988/89 I. CHANGE
----------- ----------- -----------
:36,876,827 44,991,730 22.00
13,420,339 16,236,224 20.98
1,060.,307 1,167,108 10.07
331,119 190,948 -42.34
-5,103,315 -6,561,240 28.56
----------- ----------- -----------
46,585,277 56,024,770 20.26
----------- ----------- ===========
----------- -----------
ESTIMATE
1987/88
PERSONAL SERV ICES W* 9'nl""'I'" ~~: ;~;: ;:;
MATERIALS, SERV & SUPP 15,686,595
EQUIPMENT 1,476,609
CAPITAL IMPROVEMENTS 3b8,275
DEPARTMENTAL CREDITS -6,037,503
-----------
-----------
GENERAL FUND EXPENDITURES - BY MAJOR DEPARTMENT
REVISED
ESTIMA TE. ESTIMATE ESTIMATE. 87/88-88/89
1987/88 1987/88 1988/89 I. CHANGE
----------- ----------- ----------- -----------
POLICE 18,553,908 16,806,777 18,627,221 10.83
FIRE 10,050,619 10,095,416 11,422,383 13.14
PUBLI C BUILDINGS 4,468,372 4,169,133 4,413,991 5.87
PARKS & REC 4,412,156 3,803,084 4,803,583 26.30
STREET 3,659,711 3,511,526 4,125,527 17.48
ENGINEERING 1,894,467 1,725,807 2,542,707 47 .33
OTHER 8,988,006 6.,473,534 10,089,358 55.85
----------- ----------- ----------- -----------
52,027,239 46,585,277 56,024,770 20.26
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
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