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Benicia Could Raise Taxes to Close $1 Million Budget Gap

The Benicia City Council will consider long-term plans to increase taxes as a way to stabilize the city's budget.

Benicia residents could be paying more in sales or utility taxes in the future as a way to stabilize the city's budget, according to a city staff report.

Any changes wouldn't be put to a vote for a few years, but the Benicia City Council will meet tonight to discuss a $1 million gap in the city's budget and begin to talk long-term fixes.

"In order to attain a sustainable budget in these uncertain times, staff is recommending utilizing a combination of reserves and expenditure reductions for the current year shortfall, allowing time to develop a long-term work-out plan," the staff report states.

The budget gap, which staff say is mostly caused by a drop in property tax revenue, could be solved in a number of ways, as described in the staff report for Tuesday's meeting:

  • Sales Tax: "a one-cent increase could generate $600,000 annually."
  • Parcel Tax "...however, this does not address diversification of revenues."
  • Utility Users Tax (UUT) Rate Increase: "an increase of the current rate of 3.5% to 5.0% would generate approximately $900,000 and require a simple majority vote when a Council member is standing for election."
  • Utility Users Tax, Broadened Definition: "another option is to broaden the definition of UUT to include water and would generate $287,000. Benicia currently charges 3.5% on telecommunications, gas and electricity." 
  • Increase Permit Fees: "current building and planning fees do not cover the costs of providing these services. An increase in the level of cost recovery could provide an additional $100,000 and be approved by the City Council."
  • Increase User Fees such as Recreation, Facility Rentals, and Encroachment: "these program fees are also not set to fully recover the costs of the program and increases could generate an additional $45,000."

Over the last three years, the city has cut about 25 employees and reduced the pay of city staff by 10 percent. Those cuts have made it harder to keep up with demand and to attract and retain employees, according to the staff report.

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Benicia City Council meeting
6 p.m. Tuesday
City Council Chambers, 250 East L St.

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Nick P January 23, 2013 at 04:31 AM
Or you could stop spending more than you earn.....you know, just like regular people or private companies would have to.
Liz Edwards January 23, 2013 at 02:56 PM
Is JB not coming back? I saw he has posts in the Burlingame Patch. Anyone know?
RD January 23, 2013 at 03:14 PM
Or how about not spending huge amounts of money on private consultants for projects without authorization from the public? Or how about NOT even using private consultants? That could have saved a small fortune!!! STOP raising utility bills. They are already too high!
Cody Kitaura (Editor) January 23, 2013 at 03:46 PM
Liz, JB is still with Patch but has moved on to a bigger role producing content for a number of sites in the south bay. I think he's working on writing up a formal announcement to post to the site soon.
Robert Livesay January 23, 2013 at 03:50 PM
How many employees quit the city because of the salary/benefit issue? The residents need to see that info How many folks were interviewed for positions and backed off because of salary and Benefits. Take a look around and see that most cities cut considerable more than Benicia has on salary/benefits. Taxes and fees is not the solution. Salary and benefits is where the money is. Close to 70% of budget. Also why are mayor/council getting benefits. The Mayor gets $7,000 a year for not taking healthcare. I would love to be a campaign manager for someone that is running for a council seat. If any council member seeks reelection and votes for the tax and fee increases they will be an easy target. They will go down big time to defeat. This city must get more production from its employees in these trying times. A job is better than no job. Taxes and fees are WRONG.
Robert Livesay January 23, 2013 at 04:02 PM
Take note of the word STAFF. These are city employees. They will not recommend to cut their own salary/benefit package. Why should they. Just let the residents pay for the bad management of the budget. Taxes and fees are temp fixes and are very difficult to stop once the city gets the money. Benefit and salary restructured are permanent and will help the budget issue for years to come. Taxes and fees are pure examples of the easy way out that all city, county , state and federal employees take. Remember all payroll employee residents just got their social security taxes bak up tp 6.2%. On top of that the water and sewer bill will be hitting the residents soon. I suggest that the Staff rethink their approach. How would they like a RIF.;
Laurel January 23, 2013 at 05:52 PM
Way to go Robert. My Husband's check this month reflects just that, $200.00 less between Obama care and social security, that's minus $400.00 less a month. We are lied to and it's about time we stop the wasteful spending. NO MORE TAXS!!! Look, even the High Earners are considering moving out of CA. The new tax laws will take 50% or more of their earnings. I can see it now, parents telling their kids not to be successful because the goverment will just take your money, welfare is the way to go. What is happening and how did it get so bad? The tea party stands for TAXS ENOUGH ALREADY.
Bonnie Wilks January 23, 2013 at 06:14 PM
if Benicia is so short of money WHY is the city beautifying Military West? and what about the Casino's who are suppose to be sending money to our school system? something is wrong with this picture.
Robert Livesay January 23, 2013 at 06:41 PM
Bonnie the Military project was Grant money. I will be doing a LTTE about the misuse of that Grant money. It came from the rise of $1 in bridge tolls. Grant money is tax payer money. It must be regulated and watched over. There is a career in just being able to know the ins and outs of how to file for Grant money. Can you believe that.
Robert Livesay January 23, 2013 at 06:41 PM
Bonnie the Military project was Grant money. I will be doing a LTTE about the misuse of that Grant money. It came from the rise of $1 in bridge tolls. Grant money is tax payer money. It must be regulated and watched over. There is a career in just being able to know the ins and outs of how to file for Grant money. Can you believe that.
Bonnie Wilks January 23, 2013 at 06:49 PM
you know it is really hard to believe anything about where all our tax money is going, and to who.
Michelle Kye January 23, 2013 at 06:50 PM
It's Wednesday and the lead story is from Tuesday. What happened at the City Council meeting last night? Where is our local news. Local coverage of Benicia has gone way down. I'm not finding Patch to be a useful alternative news source these days. I'm relying on the Vallejo Times Herald for all pertinent information. Benicia Patch needs to be relevent to the community and it's not doing a very good job lately.
Bonnie Wilks January 23, 2013 at 06:52 PM
AMEN TO THAT
Robert Livesay January 23, 2013 at 09:39 PM
Yes the Patch does seem to be droping the bal on local government. At one time JB and the Patch government reporter went to the council meeting. You did get very quick reporting back the very next day on very importantant issues like this.
Mary Frances Poh January 23, 2013 at 10:21 PM
Michelle, It was a study session and no decisions were made. Staff and members of the public asked questions and made comments. There will be budget hearings coming up. This shortfall was unexpected. It comes from the wrong figures being given to the city by the County Assessor and reflects the drop in property taxes. I think if you look on the City's website you can find the power point presentation and the various scenarios that were proposed to close the shortfall. Donna Beth from the Benicia Herald was there and she has been doing a good job covering this in the paper. Also HR Autz was there and he will have something to say I am sure. Obviously I was there or I wouldn't know what happenned!!
Mary Frances Poh January 23, 2013 at 10:22 PM
I didn't mean to say staff, I meant to say Council.
Robert Livesay January 23, 2013 at 10:52 PM
This was not the first time of budget shortfall. It has happened before. The city deals with the County Assessor all the time. They do understand the info is not always correct. The only way to protect from shortfalls at this time and in the future is to correct the process. A rainy day fund is not unusual and would be a good safeguard. So the only way to create that money for a shortfall emergency is to work on the salary/budget issues to bring them in line to what other agency's are doing This is not new.
Robert Livesay January 23, 2013 at 11:10 PM
Some might call it restructuring the benefits or salary. This portion of the budget is 70% of budget. The most logical place to go. I am not saying it is the employees fault. It is not also the tax paying residents fault. So why should any of the burden be placed on the residents. Bad city planning. If they do not fix the set benefit cost and salary issues it will continue to occur. Remember they will ask for an increase in salary some where along the way. They should be able to expect that. The city did do a make over of the healthcare benefits. Except for fire and safety the at once saving or cost to the city of healthcare per employee actual went up by about 5%. Fire and safety have been hit the hardest. Remember they are now paying part of the employer share of Calpers. Still cost the city more for healthcare even with a tiered plan. Yes they did cap the amount city wil pay and the burden of increase will fall on the employee. That amount the city is paying should have been reduced not increased along with options on the healcare tiers fo the employee. to make their own personal budget choices. Very common practice.
Cody Kitaura (Editor) January 24, 2013 at 12:00 AM
Mary, thanks for that comment. We'll definitely be following up on this story as things develop.
rob pearson January 24, 2013 at 12:04 AM
Well Well Well I see the same ole record playing here again. The city needs money but the city wastes the money on new solar projects and road medians/sidewalks. We really need some people on the council that care about the people and i am going to seriously think about running. When i lived in the Midwest we had one guy outside the good ole boys club on the council. They tried to impeach him and tried a recall but he won out. He saved the city so much money on ridiculous projects. This is what we need for our city-not people that only know how to write checks. I am documenting all the votes so i can use that info against the current money changers we now have in office. Vote for me and i will help set you free!
rob pearson January 24, 2013 at 12:06 AM
Did i read the new correctly about a possible parcel tax remedy? I believe it said all they need is a simple majority to pass this tax yet it too a 2/3 majority for the school parcel tax proposal?
Annie Marie January 24, 2013 at 01:51 AM
I completely agree, we DO NOT need outside consultants...try cutting those out before asking us to pay more please!
Gretchen Filer January 24, 2013 at 02:04 AM
Absolutely! But then why would we think our local government would be any more fiscally responsible than the feds? Optional projects like the Military Ave "upgrade" at First St., the continued hiring of consultants and lawyers (even though we have a well paid City Attorney), etc. I guess it's just old fashioned thinking to actually have the money BEFORE you spend it -- that you might need to tighten the belt or DO WITHOUT until the money is there.
Gretchen Filer January 24, 2013 at 02:06 AM
And, of course, we were promised that the bridge tolls were "temporary" just until the Bridge was paid for. When I moved here it was 40 cents, 25 cents for commuters. Now the toll keeps increasing with money spent for other things.
Jason January 24, 2013 at 03:49 AM
What regular people? The tens of millions sitting on trillions in student loan debt, credit card debt, and mortgages they never had any hope of repaying all begging Obama to "forgive" their debts and stop banks from collecting? The government is no less irresponsible that the average person.
AL January 24, 2013 at 07:01 AM
Just like they said every resident was notified of their right to protest the water "fees" ( your bills will be 40% higher in 3years)- I asked a few days before the deadline and council meeting for a feature or at least announcement on Patch- but there was nothing so I believe this site now like mainstream news- its all just what they want us to hear
rob pearson January 24, 2013 at 04:05 PM
Has anyone heard the city complaining about losing money on the water system prior to the increase? Now i see an audit being done and suddenly they are losing over 2 million between providing water and treatment. All this popped up with a couple articles about the inefficiency of our system so i ask you, what the heck is going on here? This seems like a major cover up. Perhaps our UN-needed city treasurer could perform an investigation for us so he will have something to do?
Robert Livesay February 01, 2013 at 08:10 PM
Rob the budget will get balanced. There will be no new taxes or fees. If any fee changes it will be minor. They are already doing some things to get this done. It will take about 18 months to get everything in place. It will happen. A balanced budget.

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