By Sheryl Hamlin

The City Manager of Santa Paula presented the FY 17/18 budget with and without the fire annexation. Annexation was approved at the April 10, 2018 Special Council Meeting.

This article is based on the City Manager’s budget numbers taken from the illegible pie charts converted into a columnar presentation. Refer to the rightmost column labeled “With Annexation” for this article.

General Fund Revenue

The total General Fund revenue shown is $12,582,836. According to the City Manager, this is the entire General Fund. However there is also the Measure T fund which is usable by the General Fund.

$2,600,000 or 20.6% of the budgeted revenues depend on the Vehicle Licence Fee Swap of 2004, which was modified in 2011, giving several cities much less money. Orange County sued over its loss in revenue. When the State wants money, the VLF is always a good target.

$2,206,925 or 17.5% of the budgeted revenue is attributed to “Transfers”. These are monies taken from the Water and Sewer Enterprise Funds for “services rendered”. Any shortfall in the Enterprise Funds is made up from rate increases.

The Sales Tax revenue shown is $2,545,000. This is regular sales tax. From a previous meeting, we know that Measure T Sales Tax monies are kept in a different fund, separate from the General Fund. Read about the additional $2,197,705 Santa Paula expects to receive from Measure T, of which the city has plans for $1,676,218. The link to the Measure T article is here. Measure T sunsets in twenty years. The city is completely reliant on these monies as shown in the linked article..

Sales tax revenue is subject to the economy. We also know that a younger population spends more than an aging population. The State as a whole is collecting the most revenue from personal income tax (rich people), while sales tax revenue as a percent of all taxes has been in decline. See graphs here where you can see all of the various taxes. For example, Vehicle License Fee tax peaked in 2010 and has been dropping. Put your cursor over the date for the actual values on the graph.

The total of these three categories in the City Manager’s presentation is 58.1%, which means that over half of the General Fund Revenue is vulnerable or unsustainable. Technically Measure T should be included because it is applied to General Fund expenses, but it has not been included in this chart.

General Fund Expenses

After Police at $6.2 million, there is a category called ‘City Manager and Risk Management’ at $3.038 million, which includes insurance and workers’ comp. There are two categories ‘Community Services’ and ‘Community Development’. What are these two categories and how are they different? How many employees have been added this fiscal year?

Solutions

Classic approaches include increasing revenue and decreasing expenses. The commercial portion of East Area 1 includes some retail, but there has been no progress on this part of the project. In fact, to date, there have been no home builder(s) announced for the 1500 units, which means that any revenue from this project is uncertain as well.

The Planning Department has posted a document about approved projects, but there is nothing monetizing this list.

Highest on the preferred list would be a resort providing year-round TOT (Transit Occupancy Tax). This seems logical with the Mediterranean climate and proximity to the beach and hiking.

The city has created an Economic Development Sub-Committee which now consists of the City Manager, the Assistant City Manager, the Assistant Planning Director and the Mayor. This committee is missing one member yet to be appointed by the mayor.

To read the previous report from this meeting, click here.

To watch the City Manager’s presentation, click here

For more information on author click sherylhamlin dot com

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