All About the Utility Users Tax

Every Sierra Madre residence, business and organization must pay the Utility Users Tax. It's currently set at 10 percent. The City Council may move to increase the tax under Measure U, or ask voters to extend the incremental increases that Measure U enacted.

Here's what you need to know:

• The UUT taxes all utilities including electricity, cable, phones, gas, water, sewage and garbage collection.

• All money from the UUT goes into the city’s general fund, which provides money for “all non-restricted fund activities of the city” and public safety. Reports say a large portion of the police, fire and paramedic budgets are covered by the general fund.

• Prior to 2008, the UUT was 6 percent. Sierra Madre voters approved Measure U in 2008, which moved to increase the UUT 2 percent every year until it reached 12 percent in 2010. The measure gave the city council the authority to override the increase, which it did for 2010. The UUT is currently 10 percent.

• Records say the city council did not increase the UUT to 12 percent in 2010 because the police and fire department had $400,000 in savings due to unfulfilled staff positions and money that was budgeted for but never spent. The money was carried over into the next year’s budget.

•  Under Measure U, the council has the ability to raise the UUT as high as 12 percent through June 30, 2014. After that, the UUT would begin falling by 2 percent per year until it reached 6 percent in 2016. The falling rate is called the “Sunset Clause.”

•  Mayor Buchanan has said that the UUT will

•  , the UUT committee this year recommended that the city council raise the UUT rate to 12 percent for 2012 because of the increase in public safety expenses.

•  UUT is the only general tax revenue that has increased year over year. Reports say that without the UUT, the city’s general fund would be lower than it was in 2008.

•  The UUT committee says the city council must plan for the decreased revenue that will occur when the Sunset Clause begins. The committee lists cutting city services or finding a new source of revenue as solutions. The new revenue could come from a UUT increase extension, should the city council put it on the April 2012 ballot and voters approve it. 

•  The UUT varies per household and business and depends on individual utility bills. In a report provided by the city council, an average for residential homes was estimated. If a household has a $440 monthly bill for all utilities, the 10 percent UUT would equal approximately $43.22. The 6 percent UUT would equal approximately $26.34.

Information gathered from City of Sierra Madre reports.