By SHEL SEGAL
The city of Sierra Madre is being hit in the pocket book on two fronts with the recently passed building moratorium and the sun-setting of the city’s user utility tax.
And while Elaine Aguilar, city manager in Sierra Madre, doesn’t think the city will be hit too hard by losing revenue by not issuing building permits, she said the loss of the UUT could ultimately cost the city $1 million, causing city council members to have to make choices of where to make cuts.
Aguilar said the city always budgets with the thought that not much in terms of building revenue will find its way into city coffers.
“On the development revenue forefront, the good news is we always budget conservatively,” Aguilar said. “So, the revenue numbers from the development side, we didn’t increase the numbers from last year thinking we’re going to have more development coming in. It will impact our building permit-related revenues. But we didn’t include those in the budget to begin with because we always base the current year on the last year.”
She added while the city has received much revenue in the way of permits with the Kensington Project – an assisted living facility on Sierra Madre Boulevard and Hermosa Avenue that’s currently under construction – she said she realizes that’s a one-time payment and shouldn’t be used to forecast revenues for the future.
“We had a big uptick because of the Kensington Project,” she said. “We actually took those revenues out because we knew we weren’t going to have another Kensington. So, on the development side I don’t predict there’s anything significant we’re going to have to do.”
However, how the city deals with the reduction in the UUT is a different situation, she said.
“On the sunsetting of the UUT, it goes from 10 percent to 8 percent on July 1, 2015 and to 6 percent on July 1, 2016,” Aguilar said. “It goes down 2 percent a year. Each of those 2 percent (decreases) are about $500,000. We’re estimating by the time it finally sunsets down to 6 percent it will be $1 million less in UUT revenues.”
And what will the council do? Aguilar said that’s up to the council members.
“The council’s options are they can start reducing expenditures now so that by the time it completely sunsets in two years we’ve reduced gradually over time,” she said. “Our budget this year is still balanced because we still have the full 10 percent. The council can decide let’s leave the budget as-is, but when we come back let’s talk about reducing expenditures then. At this point I don’t have direction from the council on what direction they prefer to take.”
(Shel Segal can be reached at ssegal@beaconmedianews.com. He can be followed via Twitter @segallanded.)
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