RES 90130 - Laserfiche WebLink

limited to 2% growth annually unless the property is sold cr transferred when it is reassessed at market value. Other major sources of revenue include the motor vehicle in lieu fees from the Sta~e ($2,050,000) and Hotel/Motel Taxes ($1,600,000). As indicated previously the City finances on-going services from locally generated revenues. Excluding motor vehicle-in-lieu fees which is legislatively guaranteed by the s~ate as a local source of revenue, the City receives only approximately $500,000 from the state or 1.7% of the city's operating revenue. If the rate of growth in our revenue sources declines, the community always has the ability to review existing sources for potential revision or increase to ensure that quality services can be continually provided. 2. EXPENDITURES General Fund operating appropriations and net operating transfers to other funds total $29,539,709 as compared to $26,934,493 in 1989-90. This represents a 9.7% increase over the 1989-90 fiscal year. It should be noted however, t_hat this increase includes a new $200,000 transfer out to an Equipment Replacement Fund, and the cost of adding 24.33 new positions $996,067. Without these increased costs, the 1990-91 proposed budget would represent only a 5.2% increase. As indicated previously, it is recommended that the City begin to more accurately budget for known future liabilities through the use of specific reserves. This years budget includes the allocation of $200,000 to the equipment replacement fund to begin to more accurately reflect the cost of amortizing the replacement of all city vehicles and major equipment. This allocation was made from one-time revenues consistent with the philosophy that annual operating expenditures should no= exceed annual operating revenues. The city currently maintains other active reserves for Workers Compensation, Liability Insurance, retirees' medical insurance, and employees' accrued vacation. To further the philosophy of living within our means staff has maintained the operating reserve at 10%. Municipalities have historically strived to retain a 10% reserve for economic uncertainties or emergencies. The idea is that a decline in a large revenue source such as sales taxes in a recession can be difficult to immediately respond to in reducing the cost of service delivery. With the recent earthquake experience cities who had maintained a reserve of this nature were better prepared to face the immediate expenses and economic decline inherent in a natural disaster.