AgdaPkt 2020-04-06 Special - Laserfiche WebLink

Browse Search

S.A. - Page 6 of 21 Additionally, on April 2, 2020, Governor Newsom announced the State will allow small businesses (less than $5 million in taxable annual sales) to defer payment of sales and use taxes of up to $50,000, for up to 12 months. Staff will be analyzing the negative impact this is likely to have on City revenue and will provide an update with the April 13, 2020 forecast update. Transient occupancy taxes (TOT) represent 5 percent of operating revenues and are collected by each motel/hotel/inn operator in the City and are remitted monthly. The current TOT rate is 12 percent of the rent charged to each guest. During to the Shelter in Place Order, it is anticipated that TOT revenue will also be negatively affected by the COVID-19 pandemic. Current estimates indicate occupancy rates of less than 20 percent in Redwood City, while pre -pandemic occupancy levels and room rates were very strong. Development -related revenue, including building permits, represent 5 percent of operating revenues. This revenue source, which has experienced year over year increases, will most likely be negatively impacted by the extension and modification of the Shelter in Place Order. Revenues related to fire services provided to the City of San Carlos represent 5 percent of operating revenues, but is not expected to be impacted for FY 2019-20. Franchise fees from utility providers, including solid waste/garbage franchise fees, represent 3 percent of operating revenues. It is anticipated that these revenues could be negatively impacted as economic activity decreases under the Shelter in Place Order and customers cancel or decrease their service. Business license taxes are levied on businesses operating in the City and represent 2 percent of operating revenues. It is anticipated that current fiscal year revenues will not be negatively affected by the Shelter in Place Order, but future revenues definitely could be if businesses don't re -open in the future. Recreation class fees and special event revenue represents 1 percent of operating revenue, but is primarily generated by Redwood City residents. With the latest extension and modification of the Shelter in Place Order, and the ceasing of recreation classes and special events, it is anticipated that this revenue source will be negatively impacted. Parking revenue, which is recorded in the Parking Enterprise Fund and is intended to offset costs associated with managing parking rather than serving as a general operating revenue for the City, generates approximately $2.7 million per year. As the need for parking by customers and business employees is drastically reduced during the Shelter in Place Order, it is anticipated that this revenue source will be negatively impacted. Utility Users' Tax, which is a tax of 5 percent that was imposed by the City in 1983 to be collected on telecommunications charges, gas and electric charges, and cable TV charges, represents 6 percent of operating revenue as a portion of tax revenues are used to administer the capital improvement program. Even though UUT is a general tax and can be used for any governmental purpose, it is the policy of the City to use the revenues generated from this source for capital improvements. This revenue source is not expected to be impacted for FY 2019-20. Staff is currently researching impacts on capital related funding sources, such as capital grants, and will provide an update to the City Council if there are any impacts to report. Page 6 of 21 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore