Saturday, October 11, 2008

SLT, EDC budgets

unpublished mt. news story:

By Kathryn Reed

Gridlock in Sacramento – the state set a record for the most number of days without a budget when it didn’t have one on the first of the month – and an economic downturn in nearly every sector is depleting the coffers of cities and counties.
South Lake Tahoe’s fiscal year begins Oct. 1, though the budget probably won’t come up for a vote until Oct. 7. A budget workshop will be conducted Sept. 16.
El Dorado County’s fiscal year began July 1, just like the state. A balanced budget has been approved, but the final budget is not expected to be adopted until Sept. 30. At an Aug. 25 workshop the projected $15 million deficit for 2009-10 was reduced to $6 million. More workshops are scheduled for the week of Sept. 15.

South Lake Tahoe

At an Aug. 18 city budget workshop only four members of the public attended and two of them are running for City Council. Neither of the city’s budget committee members -- Jerry Birdwell and Mike Weber – was there.
The “Budget 101” video was shown. It’s also available at Questions and comments pertained to reserves, a proposed city hall that is still being called a joint use facility, the need for sidewalks, and how to do business with few discretionary dollars.
The city is keeping its eyes on are tax revenue sources. Twenty-one percent of the $33.4 million 2007-08 general fund comes from property taxes, 18 percent from transient occupancy tax, 14 percent from sales tax and 6 percent from the 911 surcharge.
Only 22 cents of each property tax dollar comes back to the city. South Lake is making more in property tax off the hole in the ground for the wannabe convention center than it was from the commercial entities that had been there.
The hotel tax is down in all areas of the city, not to mention the state. Because visitors make up a large percentage of the sales tax dollars collected here, with fewer people in town it means fewer TOT and sales tax dollars.
As of this writing the state budget was not a done deal, which means the city does not know what dollars may be available. To balance the state’s $15 billion deficit it is looking to take or borrow (word choice depends which side you’re on) money the city would use for transportation, road projects and redevelopment efforts.
This month’s workshops will give details about what each department wants to spend money on. Gene Palazzo, redevelopment director, didn’t want to divulge ahead of time what it will mean for his department if the governor goes through with the proposal to take away $350,000 from the Redevelopment Agency. It’s possible this could be permanent and the money would forever be gone.
Some discussion at last month’s meeting centered on the 25 percent reserves the city wants to maintain after having zero reserves six years ago.
It’s a court decision which may take $550,000 from the city. The 1st District Court of Appeals ruled that Union City’s 911 surcharge is actually a tax and therefore needs to go before the voters. Because South Lake Tahoe is in the 3rd District and the court opinion was not published it is not certain if South Lake can or should continue with the surcharge. More clarity is expected before the council votes on the budget.
The city’s total dispatch budget is $850,000.
Salaries and health benefits account for 58 percent of the city’s expenditures. In the last seven years the city has averaged a 6 percent increase in overall health care expenses. The industry average is a 12-16 percent annual increase.
No longer do council members get to keep their benefits once they quit serving. However, one former council member and a spouse of a former council member receive health benefits because of when the policy change took effect.
Despite financial woes, the city usually has wriggle room each year for items beyond the mandated expenditures. The dog park is an example of this. It’s possible the position of public information officer could be resurrected – perhaps paid for with some of the marketing budget. Changing positions around could create a sustainability coordinator position.

El Dorado County

El Dorado County has a total budget of $550,994,762 for 2008-09. It is balanced, as mandated by the state. Cuts in staff and programs in the last couple of years helped.
“When people think of the county they think of roads and public safety. Overall the public will not notice a difference in those large category services,” said Mike Applegarth, senior administrative analyst for the county. “The numbers today do not account for what the state could do to us. We cut the low hanging fruit and now we are hacking at the limbs.”
They county is concerned the state may continue to mandate programs but cut funding. No state money is not a reason a city or county can nix a state mandated program.
It is future budgets that may pose even more of a problem. A three tiered approach is being taken to whittle away the $6.2 million proposed deficit for 2009-10. Deficits are forecast into fiscal year 2013.
The first tier is looking at hard costs – layoffs and cuts in service. Tier two is looking at one time and other discretionary revenue sources as to how best to allocate them. The last tier is finding savings in retirements and not buying fixed assets.
The planning and building department has lost 14 positions – seven in layoffs, seven through attrition. Five positions were cut from the facilities and fleet department, the ag department cut its workforce.
The only department growing substantially is the sheriff’s department – it added 15 spots, mostly on the West Slope.
Forty percent of the $220 million general found comes from property taxes. About two-thirds of the county budget is pass-through money from the state.
“All local governments are still feeling the affects of property tax shifts that took affect over a decade ago,” Applegarth said.
He said the county’s policy after the Angora Fire destroyed 254 houses in 2007 will not be a significant financial strain on the county in terms of lost revenue from building fees and property taxes.

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