HomeMy WebLinkAbout08-02-2004 Parks and Rec Commission agendaDATE: August 2, 2004
TIME: 7:30 pm - 9:30 pm
LOCATION: Administrative Conference Room, City of Saratoga
13777 Fruitvale Avenue, Saratoga, CA 95070
1. Call to Order
CITY OF SARATOGA
PARKS AND RECREATION COMMISSION
AGENDA
2. Roll Call: Bruno, Deimler, Chapman, Gates, Goldberg (Excused absence),
Sanquini, Soukup
3. Report on Posting of the Agenda: Pursuant to Government Code Section
54954.2, the agenda for this meeting was properly posted on July 29, 2004.
4. Accept Agenda Items and Order: No additional items may be added pursuant to
Government Code Section 54954.2.
5. Approval of Action Minutes: Meeting of July 12, 2004.
6. Public Presentation: Utility User Tax (UTT) by City of Saratoga Revenue
Review Committee (discussion only -no vote to be taken)
7. Staff Reports: (information only, no actions to be taken)
a. Recreation Director Joan Pisani
b. Staff Liaison Cary Bloomquist
8. Oral and Written Communication:
Any member of the public may address the Commission about any matter not on the agenda for
this meeting for up to three minutes. Commissioners may not comment on the matter but may
choose to place the topic on a future agenda.
9. Old Business:
None
10. New Business:
a. El Quito Park July 15, 2004 Playground Equipment Dedication Ceremony
Summary
Revenue Review Committee
July 2004
Formerly the
Vision Ad-Hoc Committee
Committee Background
The Vision Ad -Hoc Committee is now
the Revenue Review Committee
because the group decided that
developing vision for the future was less
pressing than addressing the
deterioration of City infrastructure and
remedying the lack of adequate revenue.
Z
Committee Background (cont.)
• Presented need for increased
maintenance of City infrastructure to
City Council at April Meeting
• Presented preliminary recommendation
for Utility User Tax
• Received authorization to conduct
meetings to gather community feedback
Utility User Tax Recommended
• Set at 5%
• Assessed on cable
television, telephone,
electricity, gas and
water
• Provide an
exemption for
residents who
qualify for "lifeline"
services
• In place for 10 years
with a "sunset" date
• Include an Advisory
Measure for voter
direction on fund use
4
In May and June, the committee conducted
meetings with the foliowing:
• City Commissioners
• Homeowner's Association members
• Public
Committee Activities
5
Community wanted answers to
the following questions:
1. How did the City get to this point?
2. What steps have already been taken to cut
expenditures and/or increase other revenue?
3. What are the alternatives to a Utility User
Tax?
4. What are the consequences of no action?
1. How did the City get
to this point?
• Substantial Revenue Loss over 15 Years
• Saratoga's Portion of Property Tax is Small
• Property Tax is large part of City's budget
• City's Portion of All Tax Revenues Expected to
Remain Flat
• All Costs Continue to Increase
Fund Source
Annual Loss
Total Loss since 1992
Property Tax taken by State
since the early 1990s
$695,000
$10,425,000
Loss of Utility User Tax
in 1996
$730,000
$6,987,000
Vehicle Licensing Fees taken
by State in 2003 -04
$576,000
$576,000
Additional Property Tax
expected to be taken by the
State in 2004 -05 and 2005 -06
$319,381
$638,762
Total Loss 1992 -2006
$18,626,762
Saratoga's Revenue Loss
over 15 Years
8
Saratoga's Portion of Property
Tax is Small
• Of the $70 million
collected from
Saratoga residents in
Property Tax, the
City of Saratoga
receives only $3.1
million
Ftoperty Tax Taken by State to
Fund Schools (B AF)
11%
Saratoga
4%
Saratoga Fre Lstrict
10%
Water ISsfricts
Canty
16% Special Districts
2%
Schools
55%
Saratoga is Dependent on
Property Tax Revenue
Tax Revenue Shown as Percent of Total Budget
! . 1 I
,
: i
Property Taxes ; Sales Tax ' Utility User Tax:
'Saratoga 31% 12% 0%
Campbell i
• 12% 36% 0%
Cupertino 12% 33% 9%
'Los Altos* ; 32% 13% 8%
Los Gatos 21% : 29% 0%
*L Altos receives additional property taxes dedicated to fire services.
)o
City's Portion of All Tax Revenues
Expected to Remain Flat
• In 2004 -05, the City's portion of property tax
will increase by only 1%
• Sales tax and Transient Occupancy Tax have
decreased since 2000, and for 2004 -05 will
remain at roughly the same levels as last year
• Expected increases in Vehicle Licensing Fees
are offset by State's planned takeaway in
property tax
1 1
All Costs Continue to Increase
• Sheriff's Budget for
2004 -05 includes net
increase of $350,000
per year for existing
service level
• City's contribution to
Employee Pension
fund is increasing—
$230,500 in 2004 -05
• Worker's Comp and
Health Ins. expected
to increase by
$45,000 in 2004 -05
• Supplies, materials
and other services
purchased by the
City continue to
increase
I2
Budget Reductions
Examples of Actions Taken
In 2002 -03, budget cut
by $734,500
Hiring freeze; two vacant positions cut;
capital purchases /facility maintenance
deferred
In 2003 -04, budget cut
by $1,427,810
All previous cuts, hiring freeze and
equip. /maintenance deferrals continued;
employees received no merit increases;
services such as street sweeping reduced
In 2004 -05, budget cut
by $1,466,566
All previous cuts, hiring freeze and
equip. /maintenance deferrals continued; 2
staff layoffs; employees received no merit
increase; selected contracts eliminated
2. What Steps Have Already Been
Taken to Reduce Expenditures?
13
3. What are the Alternatives to
a Utility User Tax?
Alternatives include:
• Local Sales Tax
• Parcel Tax
• Special Assessment
• General Obligation
Bond
• Landscape &
Lighting District
• Increases to existing
taxes such as
transient occupancy
tax, property transfer
tax, admissions tax,
and business tax
11-
Utility User Tax Advantages
Over Other Revenue Sources
• One of few revenue
sources safe from
State takeaway
• Common with other
Cities
• Provides single
greatest revenue
source to meet City
needs
• Previously approved
by community
• Allows a sunset
• Allows exemptions
• Fair tax based on
consumption
Requires
Community
approval via election
•
is
5% Utility User Tax Common
Among California Cities
• According to the League of California Cities,
at least 153 agencies have a utility user tax
• Rates range from 2% in Cloverdale to 11% in
Seal Beach; 116 have rates of 5% or more
• Examples of Bay Area cities:
• Cupertino 2.4%
• Portola Valley 7.5%
Gilroy 5%
Richmond 10%
I Ca
4. What are the Consequences
of No Action?
• Continued
deterioration of
streets, medians and
buildings
• Higher costs for
future repairs
• Could lose City
programs and
services as funds are
shifted
• City may be forced
to sell assets
• Capital Projects may
be cut to free up
funds for severe
needs
• Funding cuts to
outside groups such
as SASCC and
Chamber of
Commerce
1-1
Continued Deterioration of
City Infrastructure
• City staff assessed annual and deferred
maintenance needs in 2003
• Although Council and staff aware of
maintenance shortfalls, new measurement
tools and fall 2003 meetings quantified and
highlighted problems
Assessment of infrastructure and facilities revealed the following:
Add'l $ Needed Annually
Deferred Maintenance $
Streets
$850,000
$10,000,000
Curbs /gutters/
storm drains
$100,000
$4,000,000
Sidewalks
$100,000
$700,000
Bridges
N/A
$620,000
Medians
$50,000
$250,000
City Facilities
$200,000
$2,430,000
Total
$1,300,000
$18,000,000
Continued Deterioration of
City Infrastructure (cont.)
19
Continued Deterioration of
City Infrastructure (cont.)
Deterioration process is
demonstrated by the next
three photos
Street in Very Good Condition: Camino Barco
PCI = 87
21
Fair Condition Street— Soon to Need Overlay: Harleigh Drive
PCI = 65
2Z
Street in Distress: Norton Road
PCI =12
23
Revenue Review Committee
Conclusions
• City has deferred infrastructure and
facilities maintenance because of
insufficient revenue for many years.
• City needs an annual source of $3
million in additional revenue for both
the annual and deferred maintenance
• The Utility User Tax is the best option
z4
Typical Household Example
Monthly Charges:
• Cable TV $50
• Water $50
• Electricity & Gas $250
• Telephone $50
Monthly Total $400
5% UUT = $20 per month
25
Two Village Restaurant
Examples
Monthly Charges:
• Cable TV
• Water
• Electricity & Gas
• Telephone
Monthly Total
5%UUT=
$o
$500
$4000
$200
$4700
$o
$50
$1000
$110
$1160
$235/mo $58 /mo
2-6
Revenue Review Committee's
Recommendation
• Council approval to
place measure on the
November 2004 ballot
• Set the rate at 5% on
cable television,
telephone, electricity,
gas and water
• Provide an exemption
for residents who
qualify for "lifeline"
services
• Include a sunset of 10
years
• Include an Advisory
Measure for voter
direction on fund use
Why November 2004?
• General tax must be on general election
ballot (when City Council seats are open) so
if not now must wait until November 2006
• Special tax (requiring 2/3 voter approval to
pass) can be held during special election;
those costs are very high for March 2005
with one issue, County estimate is $220K
compared to $63K in November 2004
End of Presentation
21'