Agenda Item No. 12
CITY OF YUCAIPA
AGENDA REPORT
TO: Honorable Mayor and City Council
FROM: Andrew Hamilton, Director of Finance
FOR: City Council Meeting of June 27, 2022
SUBJECT: Special Tax for Yucaipa Paramedic Program
RECOMMENDATION:
That City Council adopt Resolution No. 2022-35, fixing the Special Tax for Fiscal Year 2022- 2023 for the Yucaipa Paramedic Program at the following rates:
Residential Dwelling Unit
Small Commercial Unit
Large Commercial Unit (>
Residential Care Facility
BACKGROUND:
$52
$78
10,000 sq. ft.) $156
$78 plus $3 per bed over 26
In Fiscal Year (FY) 1999/2000, the City assumed responsibility for the provision of fire protection and paramedic services. Up until that time, those services were provided to the community through a Special District of San Bernardino County, known as County Service Area No. 38 (CSA38). As a result of that assumption of responsibility, the City's fire protection services are funded entirely by revenues generated from property taxes that were shifted to the City from CSA 38.
The Paramedic Program (Program) was always intended to be funded entirely through a Paramedic Special Tax (PST) approved by the voters initially in 1987. The original PST equated to an annual amount equal to $24 per individual dwelling unit and $35 per individual commercial unit. Because of the escalation of costs, and the premise that the Program is to be funded entirely by the PST, the voters approved (Measure Y), an increase to the maximum annual PST in 2004 to the current amount of $52 per residential dwelling unit, $78 per small commercial unit, $156 per large commercial unit (> 10,000 sq. ft.) and $78 plus $3 per bed over 26 for residential care facility. The 2004 PST was approved by the voters with no escalation clause. As a result, the PST per unit has not increased in 18 years. Therefore, the total annual revenue is increased only by the number of new units assessed. In 2004, the voters understood that the assessment amount would be sufficient to cover the estimated and escalating costs of the Program for approximately 10 years, or through 2014. FY 2015/2016 represented the first year in which revenues were not sufficient to cover the annual expenses for the Program. The paramedic services accumulated fund balance had been covering the annual deficit in the Program since FY 2015/2016 until funds were depleted in FY Sn
City Council Agenda Report
Special Tax for Yucaipa Paramedic Program
For the Meeting of June 27, 2022
2019/2020. For the past three years, the Program budget shortfall is now being covered by the following funds:
Funded from:
Funded from:
General Fund
Paramedic Svcs.
Balance (Fire
Budget Shortfall
Fund Balance
Fundportion)
FY 2019/2020
$514,592
$185,607
$328,985
FY 2020/2021
$452,626
depleted
$452,626
FY 2021/2022 CY Est.
$760,268
depleted
$760,268
The annual projected deficit will continue to grow, as actual expenses exceed the paramedic revenues generated by the PST.
On March 3, 2020, voters failed to approve Measure E to levy a general Transactions and Use Tax of one-half percent, increasing the local sales tax rate from 7%% to 8'/a% that would have generated approximately $2,000,000 annually. Funds generated from the one-half percent sales tax would have been deposited and maintained in its own operational Special Revenue Fund with an appointed citizen oversight committee. Measure E was presented to the voters to: address the Program deficit, decrease response tunes on emergency 911 calls, generate funds from Yucaipa visitors to benefit local residents; enhance police and fire protection; increase local youth and senior services; and fund other general services provided throughout the City, like streets and parks maintenance.
DISCUSSION:
To continue collecting the PST, the City Council is required to annually adopt a resolution to levy the PST up to the maximum amount authorized for the needs of the paramedic program as set forth in Measure Y.
Staff recommends that Council set the FY 2022/2023 Special Tax rates at the maximum amounts allowable, consistent with the provisions of Measure Y. The Special Tax rates are as follows:
Residential $52 per year
Small Commercial $78 per year
Large Commercial (Greater than 10,000 sq. ft.) $156 per year Residential Care Facilities $78 plus $3/per bed over 26 beds As detailed throughout this report, the revenues collected from the PST are no longer sufficient to cover the annual expenses of the Program and the General Fund, fund balance that is committed to fire services, is covering the Program budget shortfall. Since the failure of Measure E, staff has been researching alternative cost recovery models. Currently, the city sends a fire engine truck to all emergency medical calls, which now make up an overwhelming majority of total calls, according to city data. The vehicles, manned by fire and ALS paramedic S! .
City Council Agenda Report
Special Tax for Yucaipa Paramedic Program
For the Meeting of June 27, 2022
personnel, often arrive before the ambulance, and provide immediate emergency medical treatment. Yet the cost to deploy these employees and render the service has no recovery mechanism other than the current PST.
To address this deficit, staff continues to develop a fee -based prograin for paramedic services, which has been initiated in other local communities. The intent of the program would be to establish fees, in addition to the current PST, for residents and non-residents for paramedic services received. Fees for residents would reflect the percentage of costs already covered by the PST and would be less than the fees charged to non-residents. Fees established for non-residents would be based on full cost recovery since they are not subject to the PST. The goal of this fee - based program is to address the projected annual shortfall. Staff will return to the Public Safety Ad -Hoc Committee for review and then to the Council with a recommended formalized program for final review and approval.
FISCAL IMPACT:
It is estimated that the amount of approximately $1,104,500 will be collected through the special assessments for FY 2022/2023, if the assessment rates are approved at the amounts stated above.
The City's FY 2022/2023 Draft Budget includes estimated expenditures/transfers out for paramedic services in the amount of $1,957,810. This includes the amount of $1,845,000 for Schedule A contract costs (personnel & operational expense) with CalFire, $63,700 for miscellaneous expenses and contingency, and $49,110 for the approved Cost Allocation Plan transfer out. As a result, paramedic expenditures/transfers out are budgeted to exceed related revenues by the amount of approximately $853,310 for FY 2022/2023.
Through FY 2015/2016, actual annual revenues had been sufficient to cover actual expenses. In those years when paramedic revenues exceeded paramedic expenses soon after Measure Y passed, those funds were set aside in the paramedic services fund balance. The accumulated fund balance was used to balance the paramedic "Budget" every year since FY 2015/2016 until funds were depleted in FY 2019/2020. That fund balance has now been depleted and the General Fund Balance (Fire Fund Balance portion) is now subsidizing the annual paramedic "Budget".
Consequently, an allocation in the amount of $853,310 from the General Fund fund balance that is committed to fire services is included in the FY 2022/2023 Draft Budget to cover the projected deficit.
Attachment: Resolution No. 2022-35
Approved by: �
/
&W
RESOLUTION NO.2022-35
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA,
CALIFORNIA, ACTING IN ITS CAPACITY AS THE GOVERNING BODY
OF THE YUCAIPA PARAMEDIC PROGRAM FIXING THE SPECIAL
TAX FOR FISCAL YEAR 2022/2023.
Section 1. The City Council of the City of Yucaipa hereby finds and detennines:
WHEREAS, that on June 2, 1987, the electors of County Service Area 38, Improvement Zone M, duly authorized a special tax levy for financing paramedic services; and WHEREAS, on March 2, 2004, the electors of the City of Yucaipa duly authorized an increase to the special tax levy for financing paramedic services; and WHEREAS, The amount of such tax shall not exceed fifty-two dollars ($52) per individual dwelling unit, seventy-eight dollars ($78) per individual small commercial unit, one hundred fifty-six ($156) per individual large commercial unit (greater than 10,000 square feet) and seventy-eight ($78) plus three ($3) per bed, over twenty-six beds, per residential care facility, per year; and
WHEREAS, the total budgeted cost of providing paramedic services for fiscal year 2022/2023 is one million, nine hundred fifty-seven thousand, eight hundred ten dollars ($1,957,810).
NOW THEREFORE, the City Council of the City of Yucaipa, as the successor to the San Bernardino County Board of Supervisors described in the Local Agency Formation Commission Resolution No. 2638, dated March 17, 1999, acting as the governing body of the Yucaipa Paramedic Program, hereby resolves and orders:
(a) That in order to fund the paramedic services budget, the special tax for fiscal year 2022/2023 shall be set at fifty-two dollars ($52) per individual dwelling unit, seventy-eight dollars ($78) per individual small commercial unit, one hundred fifty-six ($156) per individual large commercial unit (greater than 10,000 square feet) and seventy-eight ($78) plus three ($3) per bed, over twenty-six beds, per residential care facility, per year; and
(b) That this resolution shall be effective July 1, 2022.
PASSED, APPROVED AND ADOPTED this 27°i day of June 2022.
ATTEST:
DAVID AVILA, MAYOR
JENNIFER CRAWFORD, CITY CLERK
S!