Nevada City manager: All according to plan with tax hike
Little more than a year after Nevada City voters approved a temporary sales tax hike to prop up city services, their government has undertaken a number of endeavors in line with their expenditure promises and have taken steps to plan for the hike’s cessation.
The tax, dubbed Measure L during the November 2012 election, took effect at the beginning of April, jumping the city’s sales tax up to 8.5 percent by adding a 3/8-cent increase.
Revenues from Measure L, which has a five-year sunset clause, began to trickle into Nevada City’s City Hall several months after the tax took effect. As of the Sept. 13, at the end of the first fiscal quarter of the financial year, the city had garnered $105,984 of the nearly $400,000 estimated to come in the first year — slightly more than anticipated, said Catrina Olson, the city’s assistant city manager who handles finances.
“We should be at about 25 percent received,” Olson said. “We are probably doing a little better — about 27 percent.”
Of that revenue, the city had spent almost $15,000, Olson said. Among those expenditures was the resurfacing of a driveway into a city fire station, as well as work on a fire station roof, Olson said.
The city has also allocated staff time to update the municipal code and purchased a pool cover for Pioneer Park’s swimming facility.
“We have purchased some computer equipment for city hall and some police equipment,” said City Manager David Brennan.
While those expenditures may seem somewhat underwhelming, Brennan said that those expenditures relieved pressure on the city’s general fund, which itself was then able to absorb several costs originally planned to be funded by Measure L, such as eliminating city staff furloughs and funding police department positions. The city has also acquired new police vehicles.
“There has been improvement in the general fund,” Olson said.
During the economic downturn, Nevada City lost $487,000 in tax revenues from 2008-09 levels — forcing the city to staff some of its most prominent positions with part-time employees, including the city’s manager, attorney, engineer and its police chief, on top of furloughs.
The city also deferred maintenance and did not fill vacated positions, such as police officers, along with other cost-saving measures.
While the city has taken steps toward expenditures promised to voters already, the coming calendar year holds more notable expenditures.
Perhaps the most notable is funding a full-time police chief after years of relying on a part-time leader to save money.
On Dec. 12, The Union reported that the city had hired Tim Foley, a retired lieutenant with the San Francisco Police Department, to begin as the new chief on Feb. 3. The city has also approved adding security improvements to the shared lobby of City Hall and the Nevada City Police Department.
The city has also set aside $30,000 toward funding a $47,000 feasibility study of a renovation/rebuild of the Nevada County Courthouse, which overlooks downtown Nevada City.
The project was cut from the state’s judicial construction budget last year as those funds were absorbed into the state’s general fund. Nevada City has argued its downtown renovation/rebuild is vital to the city’s economic vitality.
Looking further out, the city is also beginning to build a reserve fund to spread the five-year tax over a longer time period, Brennan said.
“Reserves could expand the expenditures to seven or eight years,” Brennan said. “Over time, say seven years, the city should be able to see some improvements to help with (general fund) revenue and potential cost efficiencies.”
Ultimately, the goal of Measure L is to expend its revenues on either one-time equipment or deferred maintenance projects, with any expenditures that represent a continuous cost, such as a salary, absorbed by the city’s general fund.
However, that assumes the general fund recovers to some of its pre-recession levels, otherwise residents could be asked to extend the tax measure.
“That is something that could be extended, or considered, but I think the city should be able to not have to do that,” Brennan said.
“I see no reason why the expenditure plan would not carry the city through. The bottom line is everything is moving according to plan with minor adjustments, dependent on what pops up.”
To contact Staff Writer Christopher Rosacker, email firstname.lastname@example.org or call 530-477-4236.
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