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Yes, all components of the low-income and senior citizen exemption program will remain the same for the new measure.
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The UUT is an 8% tax on home and business utilities:
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.
The UUT produces $11 million annually - or 22% of total General Fund revenues. It has had an immediate and lasting impact, providing increased:
During its first four years, from 2003 to 2007, the UUT provided funding for the following:
The average Rialto resident pays up to $30 per month as a result of the utility tax.
No. The current 8% tax rate will remain the same if the measure is approved.
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 Utility Users Tax (UUT) extension the City faces a projected budget deficit in the 2014 fiscal year of $7.6 million.
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 to 80% of expenditures, making service reductions difficult. Moving forward, options include hiring freezes, additional staffing reductions, and salary and/or benefit reductions.
To avoid a financial calamity, the level of service the City provides must not exceed our means to pay for those services. Without a Utility Users Tax (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:
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.
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 Utility Users Tax (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.