2008-02-19 4-A Power Point dud et Review
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As of February 2008
Agenda
• Economic Outlook
• State Budget
• General Fund
- Revenues
- Expenditures
• Fund Balance Forecast
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Power Point Presentation at the
02.19-08 Joint Meeting
Re: Agenda Item #4-A 1
Economic
utlook
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Economic Outlook
• National Economy
-Slowing economy in 2008; some growth
possible in late 2009
-Credit tightening, reduced housing starts,
consumer confidence falling
• Regional Economy
- Recession -short and shallow ?
- Housing sales -declining; volume and price
-Credit -tightening; housing & consumer debt
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State
Bud et
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$14.5 Billion Deficit
• FY 2007/08 -Fiscal Emergency declared (not a
Prop 1 A Severe Fiscal Hardship)
- 45 day special legislative session called to agree to
cuts
- Sell Economic Recovery Bonds
- Extend "Triple Flip" to 2012
- Defer Gas Tax payments
• FY 2008/09 -Structural Deficit
- Defer second payment of Prop 1 B
-Booking Fee increase
- Silent on Prop 42 and Prop 1 A
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Proposition 1A
• Constitutional protection of local property taxes
and transportation funds
- Passed by voters in 2004
• Legislature may "borrow" up to 8% of property
tax revenues
- Governor proclaims "severe fiscal hardship"
- Urgent statute suspending Prop 1 A by 2/3 vote
- Statute providing full repayment with interest in 3
years
General
Fund
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Revenue Challenges
Revenue estimates down $4 million
? Property Transfer Tax - $1.4 million
? Property Tax - $821,000
? Vehicle In Lieu Fee - $828,000
Planning & Building Fees - $336,000
? Other - $564,000
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Revenue Forecast: $83.6 Million
Revenue from
Other Agencies
$1.OM
1%
Carryforward/Use Property Tax
of Resv 56.2M $21.5M
7 % ~I o
26 /o
Current Services ~
$7.1 M ~
8/
Utility Users
Transfers In from Tax $6.4M
other City Funds 14 1 Q%
$8.9M
17 %
All Other "Levies" r/ Motor Vehicle
$1s.aM in Lieu $5.8M
18% ~ 7%
Sales Tax - ---i______ Property
City Portion Transfer Tax
$a.9M $4.3M, 5% is
6%
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Revenue Enhancement Plan
Near term:
• Monitor current revenues
• Review fees
Long term:
• Explore targeted taxes and fees
• Continue economic development efforts
- Focus on sales tax generators
Revenue enhancement not expected to significantly
increase projected revenues for the remainder of
FY 2007/08.
Expenditure Challenges
• Reduce expenditures while transitioning to
a lower revenue base
• Maintain provision of services to the
community
• Public Safety = 61 % of total General Fund
expenditures
• Salaries and benefits for General Fund
departments = 75% of total expenditures
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Salaries & Benefits
Salary & Benefits ~ Other
60 Millions
50 - _ _ -
40 _
30 _ -
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FY 2007/08 Expenditure
Reduction Plan
Expenditure reductions total $3 minion
• Salary and benefit savings
- Strategic hiring freeze
- Assure appropriate allocation of salaries & benefits to
other funds
• Capital projects
- Close out completed projects
- Maximize use of special revenue sources for C4P
- Defer one capital project
• Supplies and services
- Limit purchases
• Debt portfolio review
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Expenditures by Function: $84.6 Million
Debt, Risk Mgmt,
CIP Transfers Other $4.5M
$2.7M 5% Police $24.5M
Admin & IT 3% 30%
$7.OM
8%
Planning & Bldg Police/Fire
$3.9M Pension $2.8M
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5% "i ~ ; ~r
Public Works ~ ` ~r~~ "
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$9.4M I
11 %
Parks $4.2M OPEB $1.8M
5°0 2%
> ~3` k ~ ~ J ^
Library $2.OM
2% Fire $21.9M
26% 1s
FY 2007/00
Fund Balance F®recast
Use $1 million of Fund Balance to help close
gap between revenues and expenditures.
- 17% estimated Fund Balance at June 30, 2008
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Recommendations
1. Accept the report and approve
adjustments.
2. Continue to monitor revenues and look for
opportunities to reduce expenditures in the
FY 2007/08 budget .
3. Undertake thoughtful structural realignment
for the FY 2008/09 and FY 2009/10
budgets
- Identify and pursue new revenues
- Identify service level alternatives
Bud et Revie~N
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As of February 2008
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