HomeMy WebLinkAboutReso 2011-111 - Biennial Budget
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Resolution No. 2011 - 111
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
APPROVING AND ADOPTING THE BIENNIAL BUDGET FOR FISCAL
YEARS ENDING JUNE 30, 2012 AND 2013
WHEREAS, proposed budget requests have been submitted to the City Manager by
Department Directors of the City; and
WHEREAS, such requests and all sources of revenue have been studied by the City Manager
and the Finance Department; and
WHEREAS, the City Manager has submitted a Proposed Budget which was balanced and
prudent; and
WHEREAS, the City Council held a budget hearing and solicited input from the public; and
WHEREAS, the City Council has considered the Proposed Budget to serve the residents of
the City of Redding; and
WHEREAS, the Proposed Budget reflects previously approved legislative direction of the
present and former City Councils to employ cost accounting formulas and methodologies carried
forward from budget to budget including, but not limited to: a cost allocation plan apportioning the
cost of shared resources among the various departments which benefit from those resources, internal
service funds and enterprise funds, and a payment-in-lieu of property tax (PILOT) from the Redding
Electric Utility (REU) to the General Fund; and
WHEREAS, the City Council first adopted the PILOT upon approving the budget for fiscal
year 1988-89. Before doing so, the City surveyed 34 cities with public power utilities regarding their
use of in-lieu payments or operating transfers (a transfer from a utility fund to a general fund in an
amount determined without reference to the value of utility assets) and found that half used one or
the other method; and
WHEREAS, the City Council has approved continuation ofthe PILOT in every budget since
1988-89. Upon adoption of the FY 1992-1993 budget, the City Council amended the PILOT to
include the value of capital improvement projects undertaken during the budget year in the asset base
to which the 1 % payment in lieu oftax is applied. Upon adoption ofthe FY 2002-2003 budget, the
City Council further revised the PILOT to adjust the value of assets for inflation in the calculation
of the PILOT. Upon adoption of a two-year budget in June 2005, the City Council amended the
PILOT into its current form by including the value of joint-venture assets in which REU has a share
in the asset base to which the 1 % payment in lieu oftax is applied. The City's practice is to estimate
the value of its assets over the life of a two-year budget and to calculate the PILOT based on that
estimate and to correct any variance between the PILOT calculated for the last two-year budget and
the actual asset value experienced in that time. Estimates are necessary because the PILOT formula:
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(i) includes capital projects to be completed in the two future years covered by a budget and (ii) uses
an estimate of inflation during that time. The City Council has included the PILOT pursuant to this
formula in each budget since June 2005, most recently on June 11, 2009, with respect to the
current-two-year budget, which appropriates funds for City police, fire and other services for the
2009-10 and 2010-11 fiscal years; and
WHEREAS, in light of the adoption of Proposition 26 on November 2, 2010, which
precludes certain new fees, levies or charges but is not retroactive as to local governments, the City
Council desires to maintain the existing PILOT utilizing the current accounting formula and
methodology as last modified in 2005. Attachment A to this Resolution reflects the electric in-lieu
computation worksheet incorporated into the Proposed Budget and is hereby incorporated by
reference into this Resolution. The City Council understands that Proposition 26 does not vitiate
legislation adopted prior to November 3,2010, such as the PILOT.
WHEREAS, it has been determined that this matter is not subject to the provisions of the
California Environmental Quality Act;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding as
follows:
1. That the foregoing recitals are true and correct.
2. That it is deemed to be in the best interest of the City of Redding to adopt and
approve the budget appropriations contained in the Biennial Budget for fiscal years ending June 30,
2012 and 2013, at this time.
3. That the budget appropriations referred to hereinabove are set forth in the Proposed
Budget for fiscal years ending June 30, 2012 and 2013, and that said budget appropriations are
hereby approved as the Biennial Budget for the City of Redding for the fiscal years ending June 30,
2012 and 2013.
4. That should any section, subsection, clause, or provision of this Resolution or the
Biennial Budget it adopts for any reason be held to be invalid or unconstitutional, such invalidity or
unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this
Resolution and the Biennial Budget; it being hereby expressly declared that this Resolution and the
Biennial Budget, and each section, subsection, sentence, clause, and phrase hereof would have been
adopted irrespective of the fact that anyone or more sections, subsections, sentences, clauses, or
phrases be declared invalid or unconstitutional.
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I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a special
meeting of the City Council of the City of Redding on the 22nd day of June, 2011, and was duly
adopted at said meeting by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN :
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
Bosetti, Dickerson, Sullivan, and McArthur
Jones
None
None
ATTEST:
FORM APPROVAL:
C?~"Gh. .'
PAME.LA MIZE, Clty~
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~ItRICHARD A. DUVERNAY, City Attorney
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