Title
Study session regarding a comprehensive financial review of the City of South San Francisco, including pension costs (Christina Crosby, Interim Director of Finance)
label
RECOMMENDATION
Recommendation
Staff recommends that the City Council receive this report. This is an information only item. No action is requested at this time.
Body
BACKGROUND/DISCUSSION
The purpose of this agenda item is to provide the City of South San Francisco City Council and the community in general with financial context to better understand the issue of escalating pension costs.
Like other general law cities of its kind, the City of South San Francisco (City) obtains the majority of its funding through taxes to provide services to the community. The City's primary taxes are property tax, sales tax, and transient occupancy tax (TOT), all of which are accounted for in the City's General Fund. The General Fund serves as the City's primary operating fund, and as such, is the primary focus of the study session.
Major Revenues
Property Tax
Since 1978, the property tax framework has been guided by Proposition 13, which includes the following principal tenets:
1. Annual property tax assessment is limited to one percent (1%) of the assessed value (AV) of land and improvements.
2. Annual increase in assessed value is limited to no more than two percent (2%).
3. Allocation of the 1% property tax between public entities is largely static. In San Mateo County, on average, school districts receive 43 percent, the County receives 26 percent, and local municipalities receive 18 percent. In other words, for every dollar paid in property tax, local cities receive $0.18.
4. Property is reappraised to current full value immediately upon a change in ownership.
At 30 percent of total General Fund revenues, property tax is the City's top revenue source. In Fiscal Year (FY) 2017-18, the City received $34.1 million in property tax, the majority of which came from current year secured property...
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