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May Martinez Mayor's Message

May 01, 2015 10:41AM, Published by Jennifer Neys, Categories: In Print, Community




by Mayor Rob Schroder

One of the most important duties of a city council is to exercise its fiduciary responsibility and keep the finances the public has entrusted in its care safe, secure, and properly spent. An annual audit called a Comprehensive Annual Financial Report (CAFR) is required to make sure a local government is properly handling its budget. The Martinez audit was performed by a crew of auditors working with finance department staff over a period of several weeks, up to eight hours a day. The final report was presented to the city council at its meeting on November 5, and the news was excellent. The financial condition of the city remains strong, and our Unrestricted Fund Balance (aka Rainy Day Fund) had increased by over $1.25 million to $5.7 million. This is a percentage increase from 23% to 29% of General Fund Revenues.

Now, unless you are a CPA, all of this is pretty dry stuff, but it means that our prudent stewardship of public funds, combined with the improving economy, provides more money to city services and capital improvements. With that in mind, the city council decided to take $1 million of that extra income and dedicate it to capital improvement projects, such as streets, roads, sidewalks, and other special projects. We also put $250,000 into a deferred maintenance account to maintain city hall, the senior center, and other city facilities. However, since we took that action 6 months ago, our income from the gas tax has dropped due to lower consumption and decreasing price of fuel. The California Public Employee Retirement System (CalPERS) has notified us that the required contribution rates for employee pension plans will increase substantially. 

To help stem the tide of decreasing gas tax to the state and local governments, Senator Jim Beall has introduced SB16 to create a temporary 5-year funding mechanism to provide much needed funding to preserve and improve local roadways. Sen. Jim Beall’s plan, SB16, would expressly address the backlog of maintenance needs and is estimated to generate between $2.8 and $3.6 billion annually, with funds directed to maintenance and preservation of local streets, roads, and the state highway system.

The senate plan proposes raising revenues through:

•                A 10-cent increase in the excise tax on gasoline and diesel

•                $35 Vehicle Registration Fee (VRF) increase for all vehicles

•                A $100 VRF increase for zero-emission vehicles

•                Payback of outstanding transportation loans over a three-year period

•                Truck weight fees would be returned to the transportation fund over a five- year period (20 percent annually). The general fund would be backfilled by a 0.35 percent increase in the VLF over the five-year period (raised in 0.07 percent increments over the five-year period).

Preliminary estimates show that Martinez’ share would be from $750,000 to $960,000 annually. None of us likes to pay more taxes, but this type of revenue will provide tremendous help in bringing our streets and roads back to an acceptable condition.

 



May 2015 Finances and Fiduciary Responsibility


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