FY 2018-19 and 2019-20 Adopted Operating and CIP Budget

Sales Tax Sales tax revenue for FY 18-19 and FY 19-20 is $9.6 million and $10.1 million, respectively. FY 18- 19 revenue estimates are approximately 5% higher than the mid-cycle revised estimates as consumer confidence remains high. FY 19-20, sales tax revenue is expected to increase by 5% compared to FY 18-19, largely due to continued moderate economic growth forecasted for the region as well as new business growth. Based on the most recent information provided by the City’s sales tax consultant, Avenue Insights and Analytics, Sales Tax is projected to increase approximately 2% in subsequent years.

From a property and sales tax perspective, it is important to understand that the City only receives a small portion of the total taxes paid by residents, businesses, and visitors as depicted in the following images.

Allocation of Sales Tax Rate (CurrentSalesTax Rate 9%)

VTA 2016 Measure B 0.50%

VTA 2008 Measure B 0.125%

VTA 2000 Measure A 0.50%

County Measure A 0.125%

1976 Transit 0.50%

Local Transportation Fund 0.25%

City of MH 1.0%

State 6.0%

Recreation Revenue Recreation revenue budgeted for FY 18-19 and FY 19-20 is $7.4 million and $7.6 million, respectively. Recreation revenue from memberships, program registrations, and facility rentals continue to maintain their high levels. To ensure that the City has the resources to operate and maintain its recreation facilities, the City's membership rate strategy was to increase rates once every three years, most recently in January 2018. Due to the larger than anticipated drop in membership after the most recent increase, it is proposed that beginning January 2020, rates be increased every year by smaller increments. This would soften the impacts to members with the intent of decreasing the number of cancellations and increasing revenues year over year as the rate increases compound.

RECOMMENDED BUDGET MESSAGE 17