Total Budgeted Revenue & Expenditures by Fund for Fiscal Year 2023 to 2024 (In Thousands)
- Budget Revenues: 39,694
- Budget Expenditures: 39,718
All Other Funds
- Budget Revenues: 38,233
- Budget Expenditures: 56,583
Total All Funds Combined
- Budget Revenues: 77,927
- Budget Expenditures: 96,301
Note: The difference between budget revenues and budget expenses is due to the use of fund balance to pay for one-time capital or special projects.
Property Tax is the City's largest source of revenue in the General Fund. Property tax is imposed on the assessed value of real property (land and permanently attached improvements) and tangible personal property (movable property) as of January 1 annually.
- Property Tax Distribution: San Mateo County distributes property tax proceeds to a number of local governments, school districts, and special districts within the County. The distribution is based on Assembly Bill (AB) 8 (Chapter 282, Statutes of 1979), which provides for the distribution of the proceeds generated by the 1% property tax. AB 8 allocates property tax in proportion to the share of property taxes received by a local entity prior to Proposition 13. In FY 1992/93, the State began imposing property tax shifts on local governments (discussed below).
- Proposition 13:Proposition 13, passed by voters in 1979, limits the real property tax rate to one % of assessed value, plus any rates imposed to fund indebtedness approved by the voters. Proposition 13 also allows increases to the value of real property at the rate of the Consumer Price Index, not to exceed two % per year based on the 1979 value, unless the property is improved or sold at which time the property is reassessed at market value. Since the property tax is guaranteed by placing a lien on the real property, properties are classified as secured or unsecured:
- Secured Property includes real and personal property located upon the property of the same owner. Secured roll property taxes are paid in two installments, due on December 10 and April 10.
- Unsecured Property is property for which the value of the lien is not sufficient to assure payment of the tax. Unsecured roll taxes are due on August 31.
For every $100 paid in General Property Tax to the County of San Mateo, the City of Millbrae receives $15.80.
- Education Revenue Augmentation Fund (ERAF): In FY 1992/93, the State took action to reduce its obligation for school funding, as mandated by Proposition 98, by shifting local property tax revenues to school districts via the Education Revenue Augmentation Fund (ERAF I). This was followed by two subsequent shifts in property taxes in 1993/94 (ERAF II) and FY 2004/05 (ERAF III). FY 2005/06 represented the second and last year of ERAF III where the Cities were obligated to shift funds to the State as part of the State's budget solution in FY 2004/05.
- Proposition 1A: On a positive note, the passage of Proposition 1A in November 2004 provided protection, albeit limited, via a "revenue fence" against future raids on local government property tax dollars.
Other Taxes include Sales Tax, Property Transfer Tax, Property Tax-In Lieu Vehicle License Fee, Parking Tax and Measure A.
- Sales Tax: Sales Tax is collected at the point of sale, and forwarded to the State Board of Equalization. Sales tax revenue is influenced by a variety of factors; the number of retail outlets in the City; business-to-business sales in the City; disposable income among area residents; consumer confidence; and the local rate of inflation. The City receives sales tax revenue based on a monthly estimate with quarterly adjustments for actual receipts.
For every taxable $100 purchase made within Millbrae, the City receives $0.75 of the $8.25 paid in total sales tax.
- Property Transfer Tax: Property Transfer Tax is imposed on real estate sold over $100 in value, and the tax is levied at the rate of 55 cents per $500 or fraction of $500 of value. That equates to $1.10 for every thousand dollars of value. This tax is shared with San Mateo County.
- Property Tax In Lieu Vehicle License Fee: The Vehicle License Fee (VLF) for each vehicle is calculated at a percentage of the vehicle's market value, as adjusted for depreciation. These fees are paid annually to the State Department of Motor Vehicles at registration and renewal. The fee is imposed by the State "in lieu" of local property taxes on the vehicle. The FY 2004-05 State budget included swapping VLF for property tax by backfilling that revenue with additional property tax. The State eliminated $4.1 billion in VLF backfill and took the VLF rate from 2% to 0.65%. Cities instead receive an equivalent amount of property taxes.
Transient Occupancy Tax (TOT) is imposed on the daily rental price of a room in a lodging facility when used by visitors staying in the City of Millbrae for less than 30 days. The tax is collected and remitted by hotel operators. The TOT for the City is 14% of gross room receipts and is allocated directly to General Fund functions.
Private utility companies pay franchise fees to the City of Millbrae in exchange for the use of the City's rights-of-way. Franchise fees are set through Franchise Agreements negotiated between the City and individual utility companies. The City of Millbrae currently has franchise agreements with Pacific Gas and Electric, Comcast Cable Company and receives franchise fees from South San Francisco Scavenger Company.
Nearly every city in California levies a Business License Tax (BLT) for the privilege of operating a business within their city. In the City of Millbrae, the BLT is charged annually and is applied either to gross receipts or payroll, depending on the type of business.
Permits, Engineer & Planning Fees
This category reflects the fees that are paid by developers to offset costs of providing construction inspection and plan review services.
Fines / Forfeitures
The California Vehicle and Penal Codes impose fines and penalties for traffic violations and vehicular parking.
Use of Money & Property
The City earns interest income by investing funds not immediately required for disbursements. The City's goal is to achieve a market average rate of return throughout budgetary and economic cycles while maintaining the required liquidity to meet cash flow needs, and protecting the safety of those funds. The City's investment portfolio is managed within the parameters stated in the City's Investment Policy. Interest income is distributed to all funds based on their proportionate cash balances.
Public Safety Services
Revenue in this category reflects reimbursement for joint Fire Training, Police POST training, alarm monitoring, and other services administered by both the Police and Fire Departments.
Federal, State, & County
Funds are received from Federal, State, and County Agencies, and are generally for a specific purpose and may require some percentage of matching funds.
Other Financing Sources
Each year revenues are contributed between funds to offset staffing, equipment, and capital improvement projects. For example, the Recreation Fund receives revenue that is contributed from the General Fund to offset the cost of Recreation programs and personnel.
Water & Sanitation Service
Enterprise Funds are used to account for self-supporting activities that provide services on a user-charge basis. For example, the City provides water treatment, water distribution, sewer collection, and solid waste services to their residents. Users of these services pay utility fees, which the City deposits into an enterprise fund.
Personnel Costs include salaries and benefits. Salaries are costs associated with compensation paid to employees of the City. These costs include any cost-of-living adjustments (as provided under memoranda of understanding (MOU) between the City and employee bargaining units), overtime, part-time, and pay differentials. Benefits are costs associated with the provision of employee benefits, such as the City's contributions for retirement, group insurance, and uniform allowance.
This category reflects services performed by outside contractors, consulting firms; or individuals and includes legal and audit services, utilities such as telephone, electric, natural gas, and infrastructure and equipment maintenance.
Supply costs include material used in the operations of City departments, typically having a unit cost of less than $5,000 and are consumed during the course of the fiscal year. Such items include fuel, parts and tires, small tools, and office supplies.
Other Operating Expenditures
This category reflects Debt Service payments for principal and interest due during the fiscal year on debt issued by the City of Millbrae, and lease purchase agreements for equipment.
Capital includes expenditures that result in acquisitions of or addition to fixed assets-including furniture, vehicles, machinery and equipment, and the costs necessary to place the capital outlay item into service. A capital outlay expenditure must comprise the following elements: an estimated useful life of one year or more; a unit cost of more than $5,000; and represent a betterment or improvement.
ERAF & Property Tax Pass Through
This category reflects property tax increments passed through to San Mateo County, San Mateo High School District, San Mateo Community College, San Mateo County Office of Education, and Millbrae Elementary School District per tax sharing agreements with the former Redevelopment Agency.
Each year revenues are contributed to funds to offset staffing, equipment, and CIP projects. Such transactions are considered to be a transfer out in the fund contributing the revenue. This item also includes indirect cost charges that are charged to various funds for General Fund operations.