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ECONOMIC RECOVERY REVIEW FOR FISCAL YEAR 2015-16
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According to Section 19 (“Citizen Oversight”) of the Measure A enacting Ordinance (Ordinance No. 2013-07-09-1601), the Measure A Citizens’ Advisory Committee is tasked to: “review progress toward peak general fund revenues as described in Section 18 of this Ordinance and any findings made by the City Council under that section or section 17, subdivision (b).”
Section 18 (“Economic Recovery Review”) of that ordinance reads: “Peak revenues to the City’s general fund occurred in the fiscal year 2008-2009 when the City received approximately $203,101,529 in such revenues. In the event the City, during any fiscal year in which this Ordinance is in effect, receives general fund (excluding amounts of such revenues transferred by the City to San Joaquin County pursuant to any tax sharing agreement, and excluding revenues under this Ordinance) in excess of the peak amount reached in fiscal year 2008-2009 adjusted for inflation from July 1, 2008 to the date of measurement using an average of the Consumer Price Indices for All Urban Consumers (1982-84=100) (CPI-U) for (i) U.S. City Average; (ii) San Francisco-Oakland-San Jose; and (iii) Western Urban, then the City Council shall hold a noticed public hearing to consider whether to reduce or eliminate the tax imposed by this Ordinance.”
The Ordinance (Section 17-“Sunset of Tax”) also stipulates that the Measure A tax is effective until one of three specified conditions occurs:
• The City Council or voters repeal the tax;
• The City Council determines the City has experienced economic recovery as defined;
• Ten years have passed since the tax was first collected.
The City Council is authorized to extend the sunset of the tax after holding two public meetings and adopting findings that the tax is still necessary and that total City employee compensation is not excessive compared to other similarly-situated public-sector employees.
Staff provided the last Economic Recovery Review reflecting Fiscal Year (FY) 2014-15 actual General Fund revenues and FY 2015-16 budget revenues to the Committee on February 4, 2016. This City intends to provide this information to the Committee annually.
Attachment A shows the annual CPI calculation compared to the General Fund actual revenues. Table 1 shows the composite CPI changes of 1.36% in 2015 and 1.75% in 2016. The FY 2008-09 peak revenues of $203.1 million adjusted for annual inflation would be $229.5 million in FY 2016-17. Table 2 on the attachment details the FY 2015-16 and FY 2016-17 adjusted revenues reconciled to page 34 of the FY 2015-16 CAFR. FY 2015-16 revenues were $41.1 million below adjusted peak revenues and FY 2016-17 budgeted revenues are $45.0 million below the peak revenues as shown in summary below.
Attachment A - Measure A Economic Recovery Review Tables