*A note to our readers: This article continues The Sentinel’s “Civic Minute” series, summarizing upcoming City Council meetings.
Sentinel staff report–
Citrus Heights City Council members will consider accepting a 172-page comprehensive annual financial report during their Feb. 13 council meeting at City Hall, along with giving final approval to changes allowing marijuana delivery and considering a $125,000 contract with a private firm to assist in long-term financial planning.
Changes to the city’s municipal code allowing the delivery of non-medical marijuana were voted on 4-1 by the council last month, with Mayor Jeff Slowey offering a token “no” vote. The item appears again before the council for a “second reading” as a formality before the ordinance is adopted. According to a staff report, the changes were made to bring the city’s code into accordance with changes at the state level.
The council meeting is scheduled to begin at 7 p.m. on Thursday and will likely be on the shorter side, as all items on the agenda are listed under the “consent calendar,” where items are voted on as a whole rather than discussed and voted on individually. The consent calendar is typically where non-controversial items are placed on the agenda, but during the meeting council members can request a consent item be voted on individually.
The $125,000 contract to be considered is a proposed agreement with Danville-based Municipal Resource Group, LLC, related to the city’s current effort to identify and fund community priorities. The agreement calls for MRG to help staff “identify alternative balancing measures for funding shortfalls and prioritization of revenue needs for utilization of future property tax revenue.”
Budget report
The city’s annual budget is adopted each year by June 30 and operated on a fiscal year, from July 1 to June 30. Highlights from the annual financial report for the most recent fiscal year (FY 2018-19) are included below:
Revenue. Total revenues are listed at $50.2 million, up from $44.9 million the prior year.
Expenses. Total expenses are listed at $57.7 million, down slightly from $57.9 million the prior year. The net cost paid by city taxpayers is listed much lower, at $33.8 million, likely referencing the impact of grants from federal, state and other sources of outside funding.
Public safety. The cost of public safety services represents the largest single expense in the city’s budget, accounting for 41.6% of total governmental activities expenses. The total cost of public safety is listed at $24 million, up from $21.7 million the prior year.
Debt interest. $70,962 was spent on interest for long-term debt, up from $0 the prior year.
Budget Reserves. The city’s General Fund Reserve balance was listed at $4.6 million, as of the end of the last fiscal year.
Sales tax. The largest single source of revenue for the city is from sales and use tax, which dropped by $3.1 million: from $15.6 million the prior year down to $12.5 million.
Property taxes. Sacramento County retained $5.59 million in property taxes from Citrus Heights. In two years, Citrus Heights will begin receiving revenue from property taxes, following the conclusion of a 25-year revenue neutrality agreement with the county that was as a condition of cityhood.
City services. Revenue from charges for city services rose from $7.9 million to $9.6 million.
Under budget. General Fund expenditures came in under budget by about $333,000, primarily due to salary savings from vacant positions. Revenues were also lower than projected, however, coming in around $208,000 less than budgeted for.
Debt. The city’s long-term debt at June 30, 2019 is listed at just under $16 million, which includes a “net pension liability” of $14 million. The outstanding balance at June 30, 2019, on the city’s line of credit is listed at $50,001. The city’s purchase of the former Sylvan Middle School for $3.4 million did not occur until after the end of the last fiscal year.
Capital assets. Capital assets for the city are valued at $337 million, with that total including: “land, art, construction in progress costs for road and other improvements, buildings and improvements, infrastructure, the City Hall and Utility Yard assets and machinery and equipment.”
An independent audit of the city’s financial statements is conducted each year. This year’s audit was conducted by Lance, Soll & Lunghard, LLP, a Southern California-based CPA firm that was contracted to perform the audit for $40,765. Auditors found the city’s financial statements were an accurate presentation of the city’s financial position.
Other facts of interest referenced in the annual report:
- There are 2,165 licensed businesses in Citrus Heights, with the majority (67%) having less than 10 employees.
- The unemployment rate in Citrus Heights is about a half-percent lower than the statewide rate, sitting at approximately 3.2 percent.
- Almost 90% of Citrus Heights’ workforce travels in from outside the city. Job growth is projected to grow in the city by 6% in the next five years.
The full financial report for fiscal year 2018-19 can be found in the City Council’s Feb. 13, 2020 agenda packet, posted online.
Got a question about the city’s budget? Submit your question for consideration in a future Q&A article by clicking here.
