AgdaPkt 2018-12-17 Joint Special

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6.G. - Page 18 of 187 (Measure DD). The Redwood City voters passed both of these measures. It is anticipated that these new general revenues will generate over $8 million annually for the City. The City estimates receiving approximately $2.0 million in revenue related to the increased sales tax in the last quarter of FY 2018-19. Property Tax Property tax accounts for approximately 41 percent of total General Fund revenues and is a key indicator of the City's economic outlook. In FY 2017-18, secured property tax revenues increased by 5.8 percent over the previous fiscal year. Budget projections for secured property taxes in Redwood City in FY 2018-19 call for a 3.8 percent increase over FY 2017-18 actuals with indications that growth in assessed value will continue in FY 2018-19 due to strong real estate sales, property improvements, and development. Utility Users' Tax This City collects a voter -approved Utilities User Tax (UUT) on gas, electricity, cable and telecommunications services. UUT revenue decreased 1.5 percent in FY 2017-18 compared to FY 2016-17, driven by a decrease in demand for wireless and cable services. As more consumers move away from cable services and toward video streaming services, UUT revenue is expected to continue to decline. Following the passage of Assembly Bill 1717 in 2014, the City entered into an agreement with the State Board of Equalization for the collection of our UUT on prepaid wireless services. The City began collecting revenue on prepaid wireless in January 2016 and will continue until AB 1717 sunsets in 2020. This revenue source amounted to $129,814 for FY 2017-18, which is 18.5 percent less than FY 2016-17. While traditional UUT revenue has been dedicated on an annual basis to support the City's capital improvement program, the City has committed this particular new source of UUT revenue to affordable housing. Educational Revenue Augmentation Fund Refunds In FY 1992-93 and FY 1993-94, the State shifted property taxes from cities, counties, and special districts to school districts to supplant funding that the State was providing to school districts. The County Controller places the funds that shifted from local government agencies into the Educational Revenue Augmentation Fund (ERAF). The Controller then disburses these funds to school districts based upon the formula prescribed by State law. Any funds remaining in ERAF (after the distribution to the school districts) are returned to the cities, county, and special districts in proportion to the amount they contributed to ERAF. This return of property tax revenue is difficult to anticipate due to complicated State school funding formulas, and is at risk of reduction or elimination by State action. In FY 2016-17 and FY 2017-18, the City received $4.9 million and $5.6 million, respectively. This level of funding was higher than can be expected in the future due to various one-time factors and recent and potential changes in school financing, which the County Controller has indicated could significantly reduce this revenue source in future fiscal years. The City's policy is to originally budget what can reasonably be estimated, which was $2.5 million, or about 45 percent of the FY 2017-18 actual amount received. The budgeted ERAF amount was subsequently adjusted in FY 2017-18 to $5.6 million, the actual amount received. The City has budgeted to receive $4.0 million for FY 2018-19. Successor Agency to the Redevelopment Agency As of July 1, 2018, the Oversight Board of the Successor Agency to the Redevelopment Agency of Redwood City was reorganized and combined with other oversight boards in San Mateo County, thus creating one Countywide Oversight Board. Going forward, action on behalf of the Successor Agency to the Redevelopment Agency of Redwood City will be taken by the San Mateo County Countywide Oversight Board. The City continues to focus on the disposition of the $10.3 million in funds that had been in the former Redevelopment Agency's possession and which were encumbered for below-market housing through an agreement with the Legal Aid Society. The control of these funds has been in dispute with the State of California Department of Finance (DOF) since the Redevelopment Agency was dissolved in FY 2011-12. The City filed suit against the State of California challenging the DOF's position that these funds are unencumbered and must be 197