Finance Highlights 2010 0127 - Laserfiche WebLink

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component of the sales tax for 2009-10. Triple flip legislation, which was enacted in 2004-05, reduced the local share of sales tax from 1% to .75%. The .25% shortfall was to be made up from property tax revenue to make local government "whole". These advances are made twice a year in conjunction with the property tax payments. This year, the State is concerned that it has or may advance too much "triple flip" to local agencies and might end the fiscal year having local governments owe the State. To avoid such an occurrence, the State has been aggressive in estimating the decline in taxable sales thereby reducing the amount of triple flip funds advanced to local agencies during the fiscal year. Unfortunately, the City is held "captive" to the State's estimate of the correct advance payments and is adjusting revenue estimates accordingly. Also attached for the Committee's review are schedules (Schedule B, Schedule C) showing the range of sales tax decreases that other Alameda County cities are experiencing and a schedule showing per capita sales tax and major economic categories of sales tax revenue. • Property Tax - in December staff received the first installment of property taxes for 2009-10. This is the first opportunity for staff to confirm the property tax estimate for the year. Unfortunately, the news is not good. Property Tax revenue continues to decline. Based on the mid-year payment staff is reducing the property tax revenue estimate from $16.4 million to $16.1 million, a further reduction of $300,000. • Utility User Tax - this revenue includes Electricity & Gas, Cable and Telecommunications. The City is experiencing a decline in revenue in the Electricity & Gas categories due to diminishing volumes experienced specifically by PG&E. These declining volumes may be .attributed to the overall economic stress communities are experiencing throughout Northern California. In addition, a negative adjustment of $126,000 based on an Energy Resource Recovery Account credit to customer accounts occurred in December 2009. Based on these factors, staff is reducing this revenue from $10.1 million to $9.5 million, a reduction of $600,000. • All Other Revenues -several other categories such as the Real Property Transfer Tax, Other Taxes and All Other Revenue are also being adjusted. Together, these adjustments result in a further net reduction in revenues of about $135,000. The adjustments are based on revenues to date and a review of prior period revenue trends. The adjustment to Other Revenue of $465,000 is to recognize the proceeds of borrowing (lease purchase) for the new fire engine. Together the reductions noted above indicate an additional revenue shortfall for the General Fund of approximately $1.985 million.