Politics & Government

Benicia's Finances Shaky Again

Property taxes and utility taxes are down and the Marina Fund continues to pull money from the General fund.

Unforeseen tax revenue shortfalls and a structural deficit in the Marina Fund could mean Benicia will dip into its reserves before the end of the fiscal year.

The shortfall is due to an $800,000 drop in property tax revenues.  According to a staff report those revised estimates were based on decreases in assessed valuation certified by the Solano County Assessor at the end of June.  What is unclear is why the information wasn’t communicated to cities throughout the county while they were building their fiscal year 2012/2013 budgets.

The Vallejo Times-Herald reports City Manager Brad Kilger has instituted a hiring freeze that will result in an immediate $165,000 saving.

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The User Utility Tax revenue drop can be traced back to the deal the city has with Valero.  The User Utility Tax is a percentage of each user’s utility bill so the higher your bill, the higher the tax you pay.  Valero’s tax is based on a running five-year average and as the years of the California energy crisis and their high cost of energy fall out of the running average the tax owed by Valero goes down.

In order to begin to effectively respond to this decrease in revenues, the City Manager is planning a special meeting in January to develop a strategic plan of action to eliminate the structural deficit.

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Adding to the budget pain is a $593,000 deficit in the trasit fund that needs to be cleared before the fund can be closed and a $197,000 deficit in the Marina Enterprise Fund.  If the council decides to deal with these added shortfalls, the total  will be $1.8 million.  The fix could include using funds from the reserve, mid-year budget cuts or a combination of the two.

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If there’s something in this article you think should be corrected, or if something else is amiss, call editor JB Davis at 707-628-0051 or email him at benicia@patch.com.


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