For more information regarding the Utility Users Tax exemption, contact (909) 820-2661
What is the Utility Users Tax (UUT)?
The UUT is an 8% tax on home and business utilities (electric, gas, phone, cable, wireless, sewer and water services). In California, about 150 municipalities and counties have a UUT. Rialto’s UUT was originally implemented in 2003 with a five-year sunset on June 30, 2008. When the UUT was approved, the City Council eliminated two taxes — the citywide PERS Property Tax and a Community Facility District (CFD) Tax in Las Colinas– saving property owners several hundred dollars in taxes each year.
The UUT was extended in 2007 for an additional five years, expiring on June 30, 2013. A measure to extend the tax another five years is scheduled for a public vote on March 5, 2013. more
How much does the UUT contribute to the general fund?
The UUT produces $11 million annually – or 22% of total General Fund revenues. It has had an immediate and lasting impact, providing increased public safety, code enforcement, street maintenance, recreation, senior center operations, and more. During its first four years, from 2003-2007, the UUT provided funding for the following:
• 9 firefighter/paramedic trainees
• 10 police officers
• 6 law-enforcement technicians
• 2 code enforcement officers
• 1 animal control officer
• 1 battalion chief
• A new fire ladder truck and engine
What does the UUT cost me?
The average Rialto resident pays up to $30.00 per month as a result of the utility tax.
Will a “yes” vote increase my taxes?
No. The current 8% tax rate will remain the same if the measure is approved.
Why is an extension necessary?
Since 2007, general fund revenues have declined by nearly $8.5 million, from $57.8 million to $49.3 million. This is due to a variety of factors, most notably the lingering economic downturn, which has cut into traditional revenue streams. The elimination of redevelopment agencies and the defeat of Measure V have put an additional financial strain on the City, to the point where even with a UUT extension the City faces a projected budget deficit in the 2014 fiscal year of $7.6 million.
What is the City doing to run a more fiscally responsible organization?
The City Council and staff are committed to operating in a fiscally responsible manner to provide vital and essential services to the City. Since 2007, we have trimmed payroll from 330 to 259 full-time positions, and we are continuing to look at ways to reduce expenses. As with most California cities, public safety represents 70-80% of expenditures, making service reductions difficult. Moving forward, options include hiring freezes, additional staffing reductions and salary and/or benefit reductions.
What If the UUT goes away?
To avoid a financial calamity, the level of service the City provides must not exceed our means to pay for those services. Without a UUT extension, our projected FY 2014 revenues would fall to $38.1 million – one-third less than they were in 2007, not counting inflation. The impact of that would be felt city-wide, including:
• Loss of up to 20 positions in the Police Department, negatively impacting emergency and non-emergency response times, reducing patrols and arrests, and potentially eliminating the narcotics, SCAT, investigations and traffic units.
• Reduction in paramedic staffing, fire prevention programs, the Arson and SWAT medic program, and up-staffing for high fire-potential events such as red-flag warnings and the Fourth of July.
• Closure of the Las Colinas Fire Station 204, resulting in longer response times and higher risk of property damage and/or loss of life.
• Inability to qualify for certain public safety-related grants that require matching local funds.
• Reductions in street sweeping, graffiti abatement, park maintenance and concrete and sidewalk repair.
• Reduction or elimination of services at the pool, senior center and community center.
• Establishment of usage fees for sports fields and lighting.
• Reduction of two of five code enforcement officers and/or support staff, and three to five public works positions.
Don’t property taxes and our new water rates pay for a lot of this?
For every dollar spent on property taxes in Rialto, the City receives 14 cents which, added up, accounts for about 10% of the City’s General Fund revenues. The average home value in Rialto declined by 60% during the recession and, as a result, property taxes for most property owners dropped by a sizable amount – this reduced property tax revenues for the City.
The water-rate increase will not pay for ongoing General Fund expenses but will be primarily used to make necessary improvements to the City’s aging water and wastewater infrastructure.
Aren’t we simply paying for employee retirement costs?
The City’s pension liability has, in fact, gone up over the past five years. At the same time, all bargaining units in the City are now paying their portion of pension costs. Without the $11 million generated by the UUT, the City’s existing liability does not go away, meaning the only way to make up the difference would be to eliminate positions and vital services. Effective January 1, 2013, all new hires are subject to a pension program which will reduce long term retirement costs.
Are low-income households and senior citizens still exempt from paying the tax?
Yes, all components of the low-income and senior citizen exemption program will remain the same for the new measure.