2009-10 Adopted Budget - City of Hoquiam

help defray policing costs. Cities receive a 40% share of the Liquor Board profits and a27% share of the liquor excise taxes. These moneys are distributed based onpopulation. So, even though Hoquiam did not have a liquor store for many years, westill received a portion of this revenue stream. By accepting these moneys, the Citymust devote at least two percent of the distribution to support an approved alcoholismor drug addiction program. Total 2009 and 2010 budgeted revenues are $108,965 ineach year respectively.Motor Vehicle Fuel TaxThe federal and state governments have preempted the taxation of gasoline andtherefore the state has provided that the state-collected gasoline tax be shared withcities. The base gas tax in most of Washington is $.23 per gallon of which the citiesreceive 10.7% that is distributed based on population.New transportation funding passed by the Legislature in 2005 provided additionalrevenues to cities. Cities received 8.3% of an additional three cent tax increasebeginning July 1, 2005, and 8.3% of another three cent gas tax beginning July 1, 2006.Cities will receive none of the two cent tax increase beginning July 1, 2007 or the oneand one-half cent tax increase beginning July 1, 2008. Total 2009 and 2010 budgetedrevenues are $205,890 in each year respectively.PUD Privilege TaxThis tax is imposed on all Public Utility Districts which operate electric generatingfacilities for the privilege of engaging in the business of generating electricity within thestate. The state collects this 2.14% tax annually based on gross revenues. Therevenue collected is shared between the state, county, and city, with the countydisbursing each share appropriately. Total 2009 and 2010 budgeted revenues are$63,099 and $61,740 respectively.Real Estate Excise TaxThe real estate excise tax is levied on all sales of real estate, measured by the fullselling price. The state levies this tax at the rate of 1.28% while the City rate is 0.25%for a total of 1.53%. The state collects the funds and remits to the Cities monthly. Thereal estate excise taxes can vary depending upon market conditions and also sellingprice. The volatile nature of this revenue source has caused us to be conservative withbudget assumptions and we are estimating less revenue than received in any of the lastfive years. Total 2009 and 2010 budgeted revenues are $56,000 and $57,000respectively.Timber SalesThe City of Hoquiam watershed is approximately 6,110 acres located 10 miles north ofthe City. The City owns and manages forest lands, for timber production, inside thewatershed which is used as the City's water supply source. The timber on thewatershed contains primarily mixed conifer and red alder. The watershed is currentlyon a 100-year harvesting rotation cycle with allowable yearly harvests of approximately50 acres. Each timber sale is put out to bid to obtain the highest revenue possible for39