What challenges is the City of San Gabriel facing?
The City of San Gabriel is facing difficult budget decisions. Decreasing tax revenues and expected State reductions in funding are forcing the City of San Gabriel to make tough decisions about city services and planned maintenance projects. Many public priorities, such as street paving and repair, along with the maintenance of city facilities may be delayed or cancelled due to budget shortfalls.
Specifically what programs and services are at risk?
During the 2008-2009 fiscal year, the City expects to have over $1.8 million in unfunded capital projects. In addition to this capital project backlog, the City is facing an ongoing $600,000 budget shortfall that cannot be adequately addressed by existing fund reserves. These estimates are also based on the 2008-2009 State budget which is not yet finalized. Any additional State funding reductions will directly impact projects and services funded by the city’s General Fund. If additional shortfalls occur, funding for police, fire and paramedic services could be jeopardized. In order to maintain current service levels, additional funding is needed.
What options is the City considering to address these budget challenges?
The City of San Gabriel is closely examining expenditures, potential cuts, and revenue increases in order to preserve services. The City is considering an update and modest increase of the city’s existing Utility Users’ Tax (UUT) to provide funding for these public priorities and to
maintain public safety budgets.
What is the Utilities Users’ Tax (UUT)?
The City of San Gabriel’s existing utility users tax is a 6% tax on electric, gas, water and telephone communication services. This UUT has been in place since 1992 and was re-authorized by voters in 2002.
What does the UUT fund?
Last year, the City of San Gabriel’s UUT provided over $3.6 million for city services such as police, fire, paramedics, parks and recreation, street and public facility maintenance. These revenues represent almost 15% of the city’s General Fund budget. |
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Why is the City considering an update of the UUT?
The City’s existing UUT ordinance should be adjusted to comply with recent changes in federal telecommunications law. First authorized in 1992 and re-authorized by voters in 2002, San Gabriel’s UUT ordinance generally follows the Federal Excise Tax, which was written for 1960s communications technology. Updating the ordinance will ensure that the UUT is being applied properly and is compliant with current federal law.
What will happen if the UUT is not modernized?
If the City does not update the UUT ordinance, up to $1.3 million in General Fund revenues may be subject to legal challenge. A loss of $1.3 million in revenues to the city’s General Fund would require a 4.5% reduction to all city budgets and services.
How will the City generate revenue to address capital project and ongoing funding needs?
The City is considering a modest increase of the City’s existing Utility Users’ Tax (UUT) to provide funding for the backlog of street repair and capital projects, as well as to address the ongoing budget deficit.
Low-income seniors and families are currently exempt from paying the UUT. Will the exemption be maintained?
Yes. Qualifiying low-income residents may be exempted from paying the UUT by filing an application with the City.
When will a city measure be on the ballot?
The City of San Gabriel is considering placing a measure on the November 4, 2008 ballot. All voters registered in the City of San Gabriel will be eligible to vote on the measure. |
