It's that time of year. The city of Campbell is looking at its operating and capital budget from 2012 and readying to approve a new one for 2013 at its June 19 city council meeting.
Jesse Takahashi, Campbell Finance Director corresponded with Campbell Patch on the 2011-12 budget, the highs and lows for the year and what 2013 will look like.
Campbell Patch: In a nutshell, how does the 2011-12 budget look?
Jesse Takahashi: The General Fund budget is expected to produce a surplus for the year close to $700,000.
Patch: What caused this?
Takahashi: The primary drivers of this good fortune are significant improvement in sales tax revenue and the hotel tax revenue, which have benefited from the economic recovery that has taken shape over the past couple of years.
Patch: What role did the in 2010 play in the budget?
Takahashi: The two increases played a significant role in stabilizing both business license tax and hotel tax revenues. The former increase was the first in over 20 years and helped keep fee revenue ahead of the cost of issuing the licenses themselves. The latter boosted our hotel tax revenues by 20 percent based on the rate increase alone and even more so due to the improvement in transient lodging.
Patch: What department/area took the biggest hit and why?
Takahashi: For 2011-12, there were no big hits taken. It was essentially a status-quo budget with the prior year.
Patch: What department/area took the smallest hit and why?
Takahashi: Same response as #4.
Patch: What effect did have on the budget?
Takahashi: RDA was eliminated February 1, 2012. However, the state is still not yet finished auditing various aspects of how RDA money was spent. While the elimination did have an overall negative impact on the FY 2012 budget, the effects were largely offset by increased revenues as discussed above.
The county and state denied the use of RDA funds for capital projects as well as a $400,000 reimbursement to the city to pay for outstanding debt on the . As a result, the city's General Fund had to absorb the loss of this funding source this year and for future years. This really was a big setback in the city's recovery efforts and ability to restore some service levels to the community.
Patch: What role will new developments and retail establishments play on the upcoming 2012-13 budget?
Takahashi: New developments are playing a big role in next year's budget.
For example, the (aka, the Boyce project) is expected to generate over $800,000 in one time fees for the city and is a big reason a surplus is budgeted for next year.
There are several other smaller projects in the pipeline as well that will all contribute to improved revenues next year. With the number of significant projects going on next year, we hope this will stimulate even more development activity in the city.
Patch: How is 2012-13 shaping up?
Takahashi: The proposed budget is projecting another surplus in 2013 despite the impact from $700,000 in lost RDA funding. Increases in sales tax and development revenues, bolstered by continued steady growth in hotel tax and improved property tax revenue is pointing toward a good economic year.
Campbell Patch will continue its budget coverage throughout the week with snapshots of the various elements that are included in the budget document.
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