RATES RATES   _______________________________________

Socialize

Pico Rivera Will Carry a $2.1 Million Surplus Into Next Fiscal Year

June 12, 2021
BY BRIAN HEWS

Recent reports by the city of Pico Rivera show the city in surprisingly good fiscal shape given the massive impacts that the pandemic had on other municipalities.

General Fund revenues are up, while expenditures are down. The city’s General Fund has several sources of revenue which include three major categories: sales tax, property tax and all other revenues, which include licenses and permits and business licenses.

Sales tax is the largest source of revenue for the General Fund, comprising more than one-third of the annual operating revenues, so the Mayor and City Council along with City Manager Steve Carmona were bracing for large decline due to the pandemic, and projected 23 percent decline.

But the losses were not as massive as first calculated, thanks to the city proactively implementing plans to assist local businesses, which led to an increase in sales tax. A rise in the property tax roll, and an increase in Pico Rivera residents shopping online were also cited as revenue drivers.

“The City has indeed been able to experience more positive results than initial expectations and through this latest reporting quarter, now shows signs of recovery,” management wrote in the staff report.

Through the first nine months of the fiscal year, sales tax is trending 4 percent ($501,000) higher than the same period last year.

Revenues through the third quarter totaled $27 million; that number is 3 percent, nearly $943,000, compared to last year, but over $903,000 came from the CARES Act.

Most economists attribute the rise in revenues to increased consumer confidence after the presidential election, which drove up sales in higher-priced “luxury” goods. Good weather, and an increase in online shopping while residents were sheltering in place meant a consistent allocation of sales tax from State and County pools.

The property tax roll, the second largest general fund revenue source, rose 4.9 percent, slightly less than the increase countywide at 6.1 percent. The median sale price of a single family home for March 2021 was $580,000, compared to $520,000 as of March 2020 an 11 percent increase.

In other revenue areas, the utility users tax is up 4 percent – or $81,000 – compared to the same period last year; parks and recreation revenues saw a significant reduction of $330,000 primarily due to the cancellation of events and in-person services; licenses and permits, which includes business license tax revenue is 35 percent higher than last year, an over $589,000 increase.

The cost side of the ledger saw 2020 total expenditures of $28.6 million compared to $29.9 million in 2019, a decrease of $1.3 million. Most expenses we’re down across the board in every major city department with the exception of Finance, the increase attributed to a new accounting software system.

This was more good news for the city its management team, extrapolating revenues and expenses out to year end shows the city generating a $2.1 surplus.

Pico Rivera Mayor Raul Elias told HMG-CN, “In keeping with my pledge to not increase taxes we intend to apply our in current surplus in diversifying our revenue sources in anticipation of declining revenues in our traditional source.”

Comments

comments

Powered by Facebook Comments