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BUDGET MESSAGE SECTION 2 <br /> <br />• Real Property Transfer Tax (RPTT) - Property Transfer Tax revenues increase by <br />$2,000,000 compared to the 2020-21 projected budget. Ballot Measure VV was <br />approved by city voters in November 2020. The measure authorizes increasing the <br />Transfer tax rate from $6 per $1,000 in valuation to $11. The projected 2020-21 <br />budget was increased by $3,200,000 at mid-year and the proposed budget adds an <br />additional increase of $2,000,000 in the first full year of Measure VV funding. RPTT <br />revenues are estimated at $9,000,000. <br /> <br />• Business Licenses Tax – Business License Tax revenues decrease by $570,000 <br />compared to the projected 2020-21 budget. The proposed budget of $5,830,000 <br />primarily arises from the closing of one of the parking operator business (primarily <br />serving long-term parking at the Oakland International Airport). The business was the <br />significant taxpayer in the parking lot classification arising from Measure OO. <br /> <br />GENERAL FUND EXPENDITURES <br />Operating expenditures are projected to increase by 8% in 2021-22 and 5% in 2022-23. <br />Employee salaries and benefits are the largest, line-item expenditures in the General <br />Fund. The Alameda County Fire Department contract services and equipment account <br />for 20% of the General Fund expenditures. <br /> <br />General Fund salaries and benefits are estimated at $63,020,600 for 2021-22. Total <br />personnel costs are expected to be significantly higher than the 2020-21 projected <br />budget. Impacts of COVID-19 pandemic led to both full-time and part-time positions <br />remaining vacant in the current fiscal year. This extraordinary level of savings is not <br />projected in the proposed budget. Personnel costs represent 48% of the General Fund <br />budget. As a service organization, the City’s core expenditures are personnel related. <br /> <br />In May 2021, the City received $9,300,000 in Fiscal Recovery Funds from the U.S. <br />Treasury. This amount represents the first half of the $18,600,000 funding allocation to <br />the City. Based on the guidelines issued by the U.S. Treasury, the City calculated its lost <br />revenues for the period ended December 31, 2020. The amount is estimated at <br />$6,735,000. Consistent with the guidelines, the budget proposes to use the recovered <br />revenues to support government services in fiscal year 2021-22 covering programs from <br />infrastructure maintenance, human services, library services, recycling program, to park <br />and street maintenance. Please note that funds cannot be used to restore reserves or <br />fund pension liabilities. As the City continues to review the guidelines and develop the <br />expenditure plan, the 2021-23 budget may be amended to incorporate the use of Fiscal <br />Recovery Funds for other important services and programs. <br /> <br /> <br />11 <br />44