here - City of Reedley

The last notable revenue source for the General Fund is Sales Tax. When a purchase is
made in Reedley, an additional 8.475% of the original purchase price is added to the original cost of
an item and represents the sales tax amount. Like property taxes, this total sales tax amount
collected from Reedley purchases is shared among the State of California, the County of Fresno and
the City of Reedley. The City’s General Fund retains a realistic “sales tax rate” of only .950% (less
than 1%) of the original purchase price due to the March 1991 Memorandum of Understanding
between the City, Redevelopment Agency, and Fresno County. Sales Tax is the only large General
Fund revenue source that has the potential for growth, but it takes large changes in the City’s
taxable sales base to realize significant adjustments. For the City to receive $20,000 additional
dollars in sales tax revenue, there must be new taxable purchases of over $2,000,000 (two million
dollars) that takes place within City limits.
As part of the 2004 State Budget package, the Legislature adopted a mechanism to fund the State’s
economic recovery bond program with a ¼ cent of sales tax. Under this mechanism commonly
known as the “Triple Flip” and outlined in Revenue and Taxation Code Section 97.68, the local
Bradley Burns Sales and Use Tax is reduced by ¼ cent. This ¼ cent is used to repay the State’s
economic recovery bonds. Cities and Counties are then provided with ad valorem property tax
revenues in lieu of these revenues. The state Director of Finance notifies each county auditor of the
amount of sales and use tax revenue loss to each city and county as a result of the Triple Flip. Each
County Auditor is then required to allocate compensating revenues to cities and counties. Reedley
receives 12 small tax payments during the fiscal year from the State Board of Equalization and 2
large “triple flip” sales tax revenue checks from Fresno County usually in January and June.
GENERAL FUND RESERVE FUND 002
In 2006-07 Council authorized the creation of a General Fund Reserve Fund (002) that maintains
$1,000,000 of general fund monies. This amount is a “savings account” of the general fund
reserves and can only be spent with Council authority. Per Council direction, the fund retains 50%
of its interest earnings and the remainder is transferred into the General Fund (001). The adoption
of the 2010-11 authorizes all accumulated interest earnings to be transferred to the General Fund
001.
PUBLIC SAFETY SALES TAX FUND 003
In February 2008 the voters approved an additional .5% sales tax to be dedicated to public safety,
specifically 70% for Police and 30% for Fire uses. This Public Safety Sales Tax is accounted for in
Fund 003. The PSST Fund does not have a sunset clause and the expenditure plan is annually
reviewed and adopted by an Oversight Committee appointed by the City Council.
PUBLIC SAFETY SALES TAX POLICE CAPITAL PROJECTS FUND 004
The 2010-11 budget authorized a portion of the police public safety sales tax monies to be set aside
into a sinking fund for future capital projects, purchases and debt service payments.
GAS TAX FUND 005
The Gas Tax fund (005) is used primarily to pay for only salaries and benefits of City employees that
work within the Road Division. Because this fund relies solely upon taxes imposed upon state-wide
gasoline sales as its only revenue source, the funds are restricted for street purposes only.
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CITY OF REEDLEY
ADOPTED BUDGET 2013-2014