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FY24-25 Mid-Year Budget Update, Appropriation Requests, and Workforce Changes
<br />March 4,2025
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<br />City’s Sales Tax consultants, staff has decreased revenue estimate by $2.8 million,
<br />bringing the total to $82.9 million.
<br />Utility Users Tax- Electric
<br />Southern California Edison (SCE) implemented multiple rate increases in 2024, and
<br />because the Utility User Tax is calculated as a percentage of consumer bills, these higher
<br />rates are generating additional revenue for the City. Additionally, increased electricity
<br />consumption driven by higher demand for air conditioning during heatwaves and the
<br />adoption of electric vehicles have further contributed to rising tax receipts. To align the
<br />revenue estimate with actual receipts, staff has increased the revenue estimate by $1.5
<br />million, bringing the total for FY24-25 to $18.3 million.
<br />Business Tax
<br />Business Tax revenues continue to exceed original estimates, driven by the diligent
<br />efforts of Treasury Services staff in Finance to ensure that all businesses operating within
<br />the City, including new businesses and those operating without a license, comply with
<br />licensing requirements. This revenue increase is expected to continue as businesses are
<br />properly onboarded and brought into compliance. As a result of these sustained efforts,
<br />staff has increased the revenue estimate by $1,250,000, bringing the total to $17,450,000.
<br />Property Tax, Property Tax, in lieu of VLF (VLF)
<br />The City received the January payment for property tax in lieu of Vehicle License Fees
<br />(VLF), which represents 50% of the annual allocation from the State. This payment
<br />enables staff to accurately forecast total revenue for the fiscal year. Following the receipt
<br />of the January payment, staff has revised the annual revenue estimate, increasing it by
<br />$456,660, bringing the total budget to $44,465,670.
<br />Documentary Stamp Tax
<br />Based on actual and projected receipts, staff increased the Documentary Stamp Tax (also
<br />known as the documentary transfer tax) revenue estimate by $400,000, bringing the total
<br />budget to $1,200,000. This tax is imposed on the transfer of real property and is typically
<br />paid when deeds, grants, or other property transfer documents are recorded. Revenue
<br />trends suggest that collections will be closer to $1,200,000, as the original budget of
<br />$800,000 was set too conservatively.
<br />Refuse Franchise Fee
<br />Under the current Franchise Fee Agreement, the City’s waste hauler is obligated to remit
<br />either a minimum annual payment of $8 million or 17.9% of gross receipts, whichever is
<br />greater. FY23-24 actual Waste Hauler franchise fee receipts were $9,555,441,
<br />representing an increase of $1.26 million or 15% compared to FY22-23. Although staff
<br />increased the Refuse Franchise Fee estimate by $1 million for FY24-25, bringing the total
<br />to $9 million, actual revenues continue to exceed expectations. To better align the budget
<br />with current trends, staff has increased the revenue estimate by $500,000, bringing the
<br />new total to $9.5 million.
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