"City Budgeting 101 & City Services”
Two opportunities offered for residents to become more informed about the budget process, how the City is financed, and its relationship to City services. The presentations included an overview of City budgeting and City services (no proposals or recommendations were presented). The sessions were held on Wednesday, November 4, 2009, and Saturday, November 7, 2009. (Two meetings held—each with the same presentation, but each includes different questions from the community).
Watch on Webcast -
Presentation -
Understanding the General Fund
The General Fund is the main component of the City’s operating budget that provides for core programs and services. Other major funds include the Revitalization Authority, the Shoreline Regional Park Community, and the Water, Wastewater and Solid Waste Management Enterprise Funds. To be able to provide a full range of services to Mountain View residents, the City relies on local tax revenues, fees and charges, and external sources, such as intergovernmental funds (State or Federal). Most of the funds the City receives, such as property tax, sales tax, and other taxes and fees are accounted for in the General Fund. These revenues are used to provide for public safety, planning, recreation, parks, library services, community services, and the regular maintenance of streets and other infrastructure throughout the City.
The General Operating Fund provides for operational services in the City, while other special funds are restricted by law for the purpose of such funds (such as water and wastewater enterprise funds) and cannot be used for general operational purposes. The General Operating Fund revenues are subject to changes in economic conditions and can fluctuate significantly. Regular cyclical fluctuations can usually be factored into to longer-term analyses, but the dramatic downturn of this current recession creates increased uncertainty.
What are the Different Types of City Funds?
Special Revenue Funds
Are to account for funds legally restricted for specific purposes. Such as the downtown revitalization activities, cable television franchise activities, federally funded Community Development Block Grant (CDBG) projects and parking district operations. Also, the Shoreline Regional Park Community Fund (North Bayshore Area) is a Special Revenue Fund.
Restricted Capital Project Funds
Are used for projects, such as park renovations and storm drain upgrades.
Most major capital projects are budgeted in the City’s General Capital Project funds.
Enterprise Funds
Account for operations financed and operated in a manner similar to private business where the intent is that the costs of providing the service to customers is financed through user charges. Examples include: Water, Wastewater and Solid Waste.
Internal Service Funds
Used to account for the financing of goods and services provided by one City department to other departments on a cost reimbursement basis. Examples of Internal Service funds include: equipment maintenance, workers’ compensation, employee benefits, retirees’ health benefits, unemployment self-insurance, and the City’s general self-insurance liability.
Other Funds
debt service funds, trust and agency funds held for others: e.g., payroll, performing arts, etc.
How is the City Funded?
To be able to provide a full range of services to Mountain View residents, the City relies on a complex mix of funding sources with the bulk of City services and projects being funded from property, sales, other taxes and fees for services. This is supplemented by grants and other one-time sources.
- Property Taxes $26.0 M 30.0%
- City receives 16% of 1% levy
- Sales Tax $15.7 M 18.0%
- City receives 1% of taxable sales
- Other Taxes $8.8 M 10.0%
- 3% Utility Users Tax (utilities and telecommunications)
- 10% Transient Occupancy Tax
- Use of Money & Property $11.5 M 13.3%
- Investment income
- Lease of City property
- Other Revenues $22.7 M 26.1%
- Federal Grants, Development Fees, Recreation Fees, etc.
- Loan Repayments $2.1 M 2.4%
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*FY 2009-10 Data
How are Tax Contributions Distributed?
- For every $1,000 you pay in property taxes to the County of Santa Clara, Mountain View receives approximately $160
- For every $100 you spend on taxable goods within the City of Mountain View, the City receives approximately $1.00 with the remaining $8.25 going to the State of California and special districts (the sales tax rate for Mountain View is 9.25 percent).
Financial Forecast Helps Future Budget Planning
As a foundation for Fiscal Year 2009-10 General Operating Fund budget preparation, the City completed a Long- Range Financial Forecast report to project revenue and expenditure trends for the next ten years. The purpose of the report is to provide the City Council with reasonable projections of Mountain View’s future financial situation in order to facilitate its current decision-making.
Trends in the report point to a continuation of a deficit based on status quo budgets throughout the 10-year forecast period and point to the difficulty of maintaining a positive balance of revenues and expenditures. In addition to quantifying this imbalance, the report also identifies economic development strategies to potentially increase revenues and identifies options for potential revenue enhancements.
For more information about the Long-Range Financial Forecast, contact the Finance and Administrative Services Department at (650) 903-6316.
