San Rafael is projecting a $2.4 million surplus for fiscal year 2022-23 thanks to sales and property taxes.
The City Council approved a $166.1 million citywide budget Tuesday that includes about $95.2 million in general fund expenditures, $97.6 million in revenues and a $9.5 million emergency reserve fund.
“For the general fund, sources exceed uses, which is what we like to see, as this means we have a surplus,” said Nadine Atieh Hade, administrative services director.
General sales taxes are expected to increase to about $25.1 million, or 1.2%, and Measure E taxes are up to $14.7 million, a 1.2% increase. Revenues from Measure R transactions and use taxes are projected to generate $4.9 million. Altogether, sales and use taxes account for 47% of the city’s general fund, Hade said.
Property taxes, which are projected to rise to $24.4 million, or 8%, represent about 25% of the general fund.
Hade said overall revenue sources are expected to increase an average of 3% to 4%.
The budget includes $23.7 million for internal services and capital replacement, including $3.1 million for sewer maintenance; $3.6 million in technology replacement and $3.6 million for retiree health benefits.
The city has received a $16 million stimulus from the American Rescue Plan Act. So far, $3.2 million of that has been used to pay for the San Quentin Pump Station replacement project. Another $600,000 has been used toward housing and homelessness initiatives.
Bill Guerin, director of public works, said the city has a three-year capital improvements program with about $8 million available in funds each year.
This year, the city has budgeted about $4 million for the construction of San Rafael fire stations 54 and 55.
Hade said the city’s pension expenses are projected to decrease by 3.9%. That is due to the city’s unfunded liability of $27 million. That is down from $148 million last year, which represents a funded ratio of 95.8%.
The city has planned to add staff in the community development and recreation department, with the goal of a citywide full-time equivalent level of 422.76 staffers, Hade said.
Due to rising costs, particularly staff salaries, there is a need to increase child care fees to ensure the city-run program’s sustainability, Hade said.
Staff is anticipating spending $4.8 million and $3.3 million in recreation and child care funds, respectively, which will lead to a deficit. The proposed 5% increase would help ensure the long-term viability of the city’s child care programs and still keep fees at affordable levels compared to other operations in the region, she said.
Another hiccup is the city’s parking fund, which is normally self-sufficient, Hade said. The past two years of the pandemic, however, have seen revenues dip, and the city has tapped into its reserves to keep it afloat. Expenses are expected to be $5 million.
Hade said staff is considering raising parking prices, but will report back later with recommendations.
Councilmember Maribeth Bushey said higher prices won’t go over well with the downtown business community.
“We need to come up with a way to solve this because we can’t put over a million dollars from the general fund every year to equalize that,” she said.
Staff will also be recording metrics on four policy areas to track how the city is spending money to support those objectives. The focus is on economic recovery; housing and homelessness; racial equity; and sustainability, climate change and disasters.
The council said they liked being able to track progress that way.
“I think I’m really excited about the budget, the way it looks right now,” Vice Mayor Rachel Kertz said. “It’s nice to be able to be in a revenue-positive situation.”
Mayor Kate Colin said a couple of years ago when the pandemic hit, city officials faced uncertainties and were unsure where they would end up.
“I really feel like we’re on solid ground and we have a plan going forward,” Colin said. “I like where we ended up.”
Source: www.mercurynews.com