Nevada City’s municipal staff is expected to submit a proposed budget for the next fiscal year at the June 26 city council meeting and special funds, outside the city’s general fund, are playing a substantial part in ensuring city services.
“Special funds over the last several fiscal years, during the economic downturn, have been an integral part of the city’s budget,” said Finance Director Catrina Olson in a June 12 report to the council.
“These funds have allowed the city to do specific operational and capital expenditures, which the general fund is not able to support.”
Foremost of those special funds is the city’s new five-year sales tax increase, approved by voters in the last November election.
Measure L is a 3/8-cent sales tax that jumped the city’s overall rate to 8.5 percent when it took effect in April, Olson reported. Its 2013/14 revenues are projected to be $395,000, with $319,000 of planned expenditures and more than $100,000 of capital outlay.
When proposed to voters, Measure L was touted as a temporary boost to city responsibilities such as police, fire and maintenance that had suffered from years of dropped tax revenues.
Voters bought into the plan, approving it by more than two-thirds — more than enough to pass the higher threshold of a special tax that is directed to a specific expenditure. As an unspecified tax dedicated to the city’s general fun, Measure L only needed a simple majority.
In lieu of the restrictions of a special tax, municipal leaders promised transparency. At one time, a citizen oversight committee was considered, similar to what Grass Valley created to watchdog its own sales tax hike.
However, the idea was nixed in Nevada City. When the topic was vetted in 2012, Nevada City resident Glenda Zanone essentially told the council it was their job to provide fiscal oversight on behalf of the taxpayers, said Councilwoman Sally Harris at a May meeting.
“The few people who commented were against it,” Harris said.
Even though Measure L funds are technically allocated to the general fund, the city has instead opted to keep them separate and track the expenditures.
In addition to a specifically designated annual review of Measure L, the tax revenues and expenditures will be outlined in quarterly financial reports along with the city’s overall finances, as the city has done with Measure S funds — a more than 15-year, half-cent sales tax benefiting roads that was passed by voters in 2006.
“Careful oversight and management of these funds in relation to the efficient management of the general fund is essential for the city to return to fiscal stability,” said City Manager David Brennan in a June 12 report to the council, which approved the expenditure and annual revenue plan unanimously.
The list of first-year expenditures for Measure L revenues is available on the city’s website, along with other financial reports.
The highlights include a $30,000 allocation to building up a currently deficient emergency fund; $35,000 toward hiring a full-time city manager to replace Brennan, a part-timer operating in an interim capacity; $30,000 to replace a fire station roof; $40,000 for city hall security; $80,000 toward vehicles; and $30,000 toward an independent study of a Nevada County Courthouse revamp or rebuild.
“This is just the first year,” Brennan told The Union last week. “Every year, we plan to revisit it. You can’t get any more transparent than that.”
The city’s other sales tax, Measure S, is projected to bring in about $556,000 for fiscal year 2013-14, a 4 percent increase from the previous year, Olson reported.
Beyond Measure S and Measure L, the city also expects $23,500 in special funds from a Mathivet trust for public safety; $190,000 of Congestion Mitigation and Air Quality funds; more than $1 million Cosumnes, American, Bear and Yuba rivers grant funds; as well as Proposition 172 and supplemental law enforcement funds.
Overall, the city’s special funds showed a favorable year-end balance. After a $321,000 transfer of fire tax revenue, the city’s special funds ended with a $18,487 balance, according to Olson.
Fiscal year 2013-14 revenues from special funds are projected to be $2.75 million, of which the city plans to spend $2.42 million.
The council is expected to delve deeper into its overall budget when it meets at 6:30 p.m. June 26 at Nevada City Hall, located at 317 Broad St. An agenda for that meeting is expected by the end of the week.
To contact Staff Writer Christopher Rosacker, email email@example.com or call (530) 477-4236.