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City to city: The revenue edition

Submitted by on 1, February 19, 2009 – 8:05 am12 Comments

So last week I did a piece comparing our city’s budget to a similar size city’s, in an effort to broaden the conversation about how our cash-strapped Island spends its dollars. I had originally intended to focus primarily on the services folks have talked about, including public safety and administration. But some interesting questions popped up that I thought I’d take a stab at answering.

A big question was how the revenue flows in each city. And this one’s got some interesting answers.

Nearly 40 percent of Redwood City’s general fund revenue comes from property taxes, compared to our 31 percent. Their sales tax revenue is $19.4 million, compared to our $5.7 million.

So if our general funds are relatively close in value (with theirs at $82.5 million to our $75.9 million, give or take library, planning and some other services we don’t include), how do we make up the difference? By taxing the crap out of ourselves, and by pulling in money from city enterprise services (think golf, ferry and Alameda Municipal Power) and other agencies.

A whopping 26 percent of our general fund budget is expected to come from other taxes and fees this year, including $4.1 million from our (pre-Proposition P) property transfer tax (though they’re now expecting to take in less than that) and $9.1 million in utility users tax, which Redwood City uses instead for capital improvements. And we’re contributing almost three times the amount that city does for licenses and permits.

Alameda is also balancing its general fund on money from other agencies, including nearly $6 million in money from the state to replace the vehicle license fee money we would have got before Gov. Schwarzenegger eliminated a scheduled fee increase. Redwood City’s general fund budget shows just about $1 million from that bucket.

But we’re also pulling in money from city-run agencies like Alameda Power and the Chuck Corica Golf Complex – enough to help put some of those agencies in the red. The golf complex, which is slated to contribute $306,451 to the general fund this year, was on track at the beginning of the year to lose around $700,000; our sewer fund is slated to be more than $2 million in the hole this year, with $641,375 going into the general fund (though this one seems to be sitting on a $40 million reserve). It’s also budgeted at around $922,000 worth of debt payments this year.

In contrast, Redwood City’s water and sewer services both appear to be in the black, with each contributing some money to city services (similar to our Alameda Power, which is on track to drop $2.8 million into the general fund this year).

If you’re looking for an update on these numbers, by the way, the city just released its second quarter financial report.

12 Comments »

  • Lauren Do says:

    Wow. I know very little about Redwood City other than they recently redeveloped their downtown area (complete with Cineplex and garage) and that they use the Shoup model of market rate pricing for the downtown parking meters. It would be interesting to learn which companies are their top sales tax revenue generators.

  • JuelleAnn says:

    Michelle

    Sewer Services generates about $6 million in revenues and spends about $3 million for operations. In the current fiscal year there is a big construction project being funded from cash ($18 million at July 1, 2008) which gives the appearance of a deficit. Funding projects must be done with cash (money saved from prior years) or debt.

    Motor Vehicle in Lieu fees – my bet is that the portion of these fees now being paid through property taxes is being counted as property tax rather than MVLF in Redwood City. Same may be true for the "triple flip" portion of sales taxes. But RC still has a whopping amount of Sales Tax revenue anyway you look at it!

  • Jayne Smythe says:

    How much Redevelopment TIDD does RC have to pay back, as opposed to Alameda?

  • Jayne Smythe says:

    … business to business taxes may also be something to compare RC to Alameda…

  • tony daysog says:

    Interesting data and analysis . . . our demographics don't seem that different either (perhaps you mentioned this already?). In any event, quite interesting. Thank you.

    http://factfinder.census.gov/servlet/DTTable?_bm=

  • tony daysog says:

    Quick look at the County Business Patterns by ZIP Code show Redwood City has several new car dealers, one of which employs more than 100 workers. On the revenue side of things, this probably explains the revenue disparity in favor of Redwood City. In California, the average new car dealership generates roughly $50 million in annual revenues . . . btw . . . I **think** there is a Costco in Redwood City. If so, on average, a Costco generates roughly $120 million in annual sales, 60-65-70 percent of which is taxable.

  • Lauren Do says:

    Tony: I think you are right about the Costco. I believe they also have a Target too.

  • David Kirwin says:

    "When people talk about the “bedroom communities” those are the nice areas to live, not El Camino and west where the retail and commercial tax dollars enter the equation"

    should be – "not El Camino and EAST – where the retail and commercial tax dollars enter the equation"

  • David Kirwin says:

    RWC also has a number of freeways and highways and was built with a roadway infrastructure which supports their high volume retail thoroughfares. In many ways RWC is a thoroughfare. It is a pass-tru for many surrounding areas –driving thru on El Camino, or cutting thru to change freeways to avoid traffic of some other route associated with #101, #280, or even to avoid a jam on #92. I had the mixed blessing of living in RWC for about a year when I held a couple positions at the Circle Star Theater. It was one of the 1st steps for me getting into the I.A.T.S.E.

    RWC also has furniture outlets – I believe Levitz may still be there, there is also a Home Depot, also Allan Steel, and the OSH may still be there too. A lot more money is spent in RWC than Alameda, and Alameda is still a nicer place to live. Don’t forget that RWC also has train stations. Aside from the nice downtown near government center, with the refurbished Fox Theater, and the ‘Little Fox Theater’, RWC has other small business centers, but I imagine the majority of retail traffic is along El Camino, (which I think is ‘seedy’ compared to Alameda), and Whipple Ave, which has more industrial sized centers. I imagine many places may be having a hard time keeping retail doors open in all the shopping centers. They do have more Fed and State $ coming in if their high-rise senior housing is a sign or the Oceanographic institute (Maybe this is part of Stamford or Cal, I don’t recall). They also have more higher education facilities, and more medical services, I think a couple of hospitals – including a full size Kaiser, not like the little Kaiser on Central in Alameda. (How much of the old Alameda Hosp, still supported by our parcel taxes has been leased to Kaiser now?) East of El Camino has the industrial employers and high volume retail, – away from the neighborhood roads which are mostly west of El Camino.

    “The Other RWC” is the neighborhood communities west of El Camino. Most of those areas are nice, quiet residential areas (more like Alameda’s neighborhoods) as it stretches into the hills bordering #280 – When people talk about the “bedroom communities” those are the nice areas to live, not El Camino and west where the retail and commercial tax dollars enter the equation.

    As for infrastructure, physical layout, and overall location, the ability and history of development in RWC and Alameda are almost polar opposites. Alameda has always been, and will continue to be a terminus for transportation – a “dead-end”. RWC by location and lay-out is itself part of a regional traffic grid. It is silly to think that comparing these two vastly distinct locations would be a useful exercise.

  • Tony Daysog says:

    Um . . . completely off topic . . . . but do you remember that Levis commercial in the late 70s, where that woman says, "Travis, you're years too late"? That commercial comes to mind because, well, it was waaay back in 1995 . . . yes, I did write 1-9-9-5 . . . that I brought up the point about how all the property taxes would be tax increment. I wasn't on Council but I attended the City Council meeting that was beginning the redevelopment process to point this out. Bill Norton acknowledged this fact that night. (Man, that's soooo long ago: I was 29 years old! Yikes, I'm 43!) I also wrote a letter to the editor (Alameda Journal) on this very subject. And, by the grace of Alameda voters, I was allowed to serve on Council, where I pushed for and got the municipal services district that we now have. I saw a problem . . . and I got a chance to fix it. Ain't perfect, but it ain't bad either.

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