Fiscal Impact Analysis of Utility Users’ Tax Initiative (Elections Code Section 9212)

Fiscal Impact Analysis of Utility Users’ Tax Initiative 
(Elections Code Section 9212) 


The City Council asked staff to complete an updated fiscal impact analysis of Measure D: Stop the Utility Users’ Tax (UUT) which appears on the April 10, 2018 ballot.  The complete report is available on the City’s website (http://www.cityofsierramadre.com/cms/One.aspx?portalId=212393&pageId=8660947and can be found by clicking on the "Fiscal Impact " link  located on the City's homepage.  The report includes specific reduction proposals as they relate to Police, Fire and Medic Services, Library, and Community Services, should a majority of voters choose to "Stop" (repeal) the Utility Users Tax.  
Graph 1

The Utility User Tax (UUT) provides 24% ($2.6M) of all General Fund revenue to the City and supports public safety (Police and Fire) and recreation programs (Library and Community Services) in addition to all other general activities of the Sierra Madre government.

The largest single area of expenditure from the General Fund is for the Sierra Madre Police Department which expends 33% of all General Fund revenues. The other large General Fund departments include the Fire Department (18% of expenditures), and the City Library (7% of expenditures). In total these departments are responsible for $6,418,700 of the total General Fund uses of 11,035,700 or 58%.  Public Safety (Police and Fire) account for more than $5.6M or 51% of the total General Fund budget.

The possible financial impact if the UUT is eliminated, and the General fund is reduced by $2.6M, could mean the entire elimination of some departments, and/or significant service 

level reductions, or changes to the way City services are provided, in addition to the specific proposals outlined in this analysis.

Reducing General Fund Expenditures by $2.6 million, while preserving all Public Safety services would necessitate a 48% reduction in all General Fund expenses outside of Police and Fire. A reduction of $2.6 million to the General Fund while keeping Public Safety intact is not possible. 

If Measure D is approved, the City Council will consider:

  • Eliminating all 4 Police Sergeant positions and 6 of 10 Police Officer positions;
  • Eliminating all paramedic and ambulance response from the Sierra Madre Fire Department;
  • Eliminating the Community Services Department in its entirety; and
  • Reducing Library services to one day a week.

If expenditure reductions fail to meet the loss in UUT revenues, the inevitable result will be the eventual depletion of General Fund reserves, potentially leading to the disincorporation of Sierra Madre.

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