Creating Sustainable Revenue Streams

By Melody De Meritt

We must act now to increase our revenue base to meet rising costs.

In 2001 and 2002, the City received $5 million from Duke Energy for the natural gas they used to make electricity. Most of that money has been spent, and the power plant doesn't run much anymore.

Nationally we are heading into an economic crisis. Prices in every indicator are going up. And while prices go up, the value of the dollar sinks.

Obviously, this news impacts the City of Morro Bay. Our utility bills and gasoline expenditures are rising just like those of residents. And, we cannot afford the impact of any empty store fronts in town.

Morro Bay is gliding close to its economic edge. Our yearly budget for 2007/08 is $10.1 million for General Fund expenses only. If all goes well, we can squeak by again for a year. However, budget predictions see a flattened revenue stream with a likely dip in sales tax and TOT revenues, given this national economy.

Our investments and cash should protect the City from bankruptcy. However, rising costs could slowly drain our cash and reach a critical status in 2 to 3 years. In an emergency situation, investments and cash could be gone within 6 months.

We must find new sources of revenue that are on-going and reliable. Here are some ideas.

We should shift our skills toward Economic Development. We must do what we can to enter the State's Enterprise Zone Program. This encourages business investment and promotes the creation of new jobs.

The City Council must again consider a Redevelopment Agency as other cities have. With this in place, the City receives any increase in property taxes after improvements to commercial or City-controlled land. Then, the redevelopment agency uses that revenue to continue improvements to our town. With this Agency we can create Tax Incentive Zones. And, a requirement of redevelopment agencies is to set aside some of the added revenue to provide residents low-interest loans for rehabilitation of homes.

We may have to reconsider the City's Parking-In Lieu program that some believe inhibits new businesses who wish to come to town. We must fill empty store fronts now to create both jobs and revenue for the City.

The City Council and City staff must look at the present shifting economy and look at how we can prepare for a secure and even prosperous future. It will take hard work and time, and we must start now.