The Breakdown: Understanding the Budget

 Funds Overview:

• The General Fund functions as the city's discretionary operating fund, and includes taxes and other general revenues and expenditures that are not restricted for other purposes. The General Fund primarily pays for public safety, parks and recreation, public works, community development and administrative activities.

• The Water Fund is a self-supporting enterprise fund that accounts for all revenues and expenses related to water operations.

Services provided by the city:

• Police and fire protection

• Construction and maintenance of streets, parks, flood control and other infrastructure

• A wharf facility, recreational and cultural activities and human services programs

• The city operates four municipal utilities, including water, wastewater, storm water and refuse collection/landfill operations, as well as enterprise operations for parking facilities and a golf course

• Certain infrastructure construction and community development activities are provided through a legally separate Redevelopment Agency, which is governed by the city and functions as a department of the city

 Sources of Revenue:

• The city’s major tax revenues include property tax, sales and use taxes, and transient occupancy (hotel) tax.

• The city of Sant Cruz has limited ability to set tax rates. The state constitution, under the provisions of Proposition 13 passed by the voters in 1978, establishes a maximum rate for property tax and limits the growth of assessed value. The constitution sets the limit for increases of the property tax rate to 2 percent per year, but upon sale, market value becomes the assessed value.

Some Taxes Passed Since 2005:

• In November 2010, city voters passed Measure H, which increased the Utility Users Tax from 7.0-8.5 percent, effective spring 2011. The city is expected to receive an additional $1.6 million annually in future years and approximately $400,000 in additional revenue in Fiscal Year 2011.

• November, 2008―Measure E. Clean River, Beaches and Ocean special parcel tax. Imposed a parcel tax to be used to protect public health and wildlife habitat in the river, bay and ocean.

• November 2006―Measure H. Increased the local transactions and use tax from the 0.25 percent authorized by Measure F in March 2004 to 0.5 percent and removed the sunset clause.

• August 2005―Measure X. Water, sewer and refuse franchise taxes imposed to replace comparable franchise fees that had been discontinued, because they were determined to be taxes rather than fees.

Fees

• Fees for enterprise services are subject to requirements that they be set at levels that do not exceed the reasonable costs of providing services. Fund balances generated by differences between fee revenue and related expense are retained and designated for services and facilities that benefit fee payers.

Please note: this is a brief breakdown of some of the topics discussed at Tuesday's City Budgeting 101 Workshop. Some of the above information is taken from a handout at Tuesday's workshop, and the rest is taken from the city website. For more detailed information, refer to the city's Fiscal Year 2012 Budget.