HomeMy WebLinkAbout09/11/1992 B A K E R S F I E L D
Kevin McDermott, Chair
Patricia J. DeMond
Ken Peterson
Staff: John W. Stinson
AGENDA
BUDGET AND FINANCE COMMITTEE
Friday, September 11, 1992
12:00 Noon
City Manager's Conference Room
1. State Budget Update (John Stinson)
2. Set Next Meeting
BAKERSFIELD
MEMORANDUM
TO' HONORABLE MAYOR AND CITY COUNCIL ~ // September 11, 1992
FROM' JOHN W. STINSON, ASSISTANT TO THg~ITY GER
SUBJECT: STATE BUDGET IMPACTS
As you are aware, the State has finally adopted a 1992-93 budget. This budget
continues the trend of utilizing local government revenues to deal with state-
wide budget problems. The impact of these State budget decisions compound the
existing losses of the past two years.
In 1990-91, the State authorized the County to implement property tax
administration fees, which amount to $415,000, and Jail Booking Fees of $273,415,
respectively, for 1992-93. In addition, in 1991-92, the State funded trial
courts by reducing vehicle code fines by $341,555 and 1/2 of the cigarette tax
in 1991-92, and the remaining 1/2 in 1992-93, totalling $370,995. These
additional expenditures and reductions in revenue result in an ongoing loss of
over 1.4 million dollars annually to the City.
In response to the more recent State budget actions, I am providing the following
information:
· The estimated impacts of the 1992-93 State budget actions total $2,051,000.
This includes a permanent loss of Property Tax ($1,555,000); Cigarette
Taxes ($190,000); Trailer Coach In-Lieu Taxes ($80,000); and Redevelopment
Tax Increment ($226,000). The Ci-garette tax loss is noted above and was
included in the adopted 1992-93 City budget.
· The ongoing impact of State budget cuts now exceeds 3.2 million dollars
annually. This loss has direct impacts on our ability to provide police,
fire and other basic public services.
· There is an additional one-time loss of property tax ($310,000) which is
offset by increased motor vehicle license fee revenue and, therefore, has
no net impact.
· The net 1992-93 revenue loss to the City is $1,861,000.
In order to respond to these reductions in revenue, the following changes in the
1992-93 budget are being recommended:
· The revenue estimates for this fiscal year have been reevaluated using
current information. This has resulted in changes in the anticipated fund
balance, increases in estimated revenues from building and planning
activity, and adjustments to various revenues. These changes reduce the
HONORABLE MAYOR AND CITY COUNCIL
September 11, 1992
Page -2-
net 1992-93 budget revenue loss to $956,000. This amount includes the loss
of Redevelopment Funds.
· State actions provide for the use of 1992-93 PERS actuarial rates in place
of 1991-92 rates. The City used the 1991-92 rates in the budget, as
directed by PERS, due to the Governor assuming actuarial responsibility.
This change in State policy will reduce existing appropriations by
$646,000.
· It is recommended that, due to the potential one-time nature of some
expenditure reductions, the hiring freeze be continued throughout the
1992-93 fiscal year. A freeze of certain vacant positions for a portion or
the remainder of the fiscal year, with the end result being a reduction in
fifteen positions through attrition, should be implemented. It is expected
that department heads may make specific requests to fill high priority
positions for continued delivery of service, particularly in the area of
public safety. However, these requests will have to be offset with
permanent budget savings.
· The remaining $310,000 will be reduced by deferring one Gas Tax Funded
Capital Project and transferring $170,000 to the Public Works Department
General Fund operating budget. Operating reductions in the Community
Development Block Grant will fund a transfer of $30,000 to the Public Works
operating budget for Curb Cuts, to comply with the Americans with
Disabilities Act. The remaining $110,000 will come from operating budget
reductions from various departments.
· It is assumed that, due to the inability of the Redevelopment Agency to
make the $226,000 payment required by the State, there will be a transfer
from the General Fund to the Redevelopment Fund, which the Agency will be
obligated to pay back in future years.
· Throughout this process, it will be important to maintain open lines of
communication between all parties affected by these changes. Methods will
be implemented to communicate these decisions to the City Council,
department heads and City employee groups.
JWS.AT.alb
cc: Department Heads
City Employee Groups