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City Council <br />Meeting Minutes <br />June 7, 2016 <br />Page 2 of 11 <br />A. Approval of Bills <br />B. Approval of Minutes — May 10, 2016 <br />C. Approval of Summer Meeting Schedule <br />BUDGET RETREAT: DISCUSSION/DIRECTION - 2017-2021 CAPITAL <br />IMPROVEMENT PLAN AND RELATED ISSUES <br />City Manager Fleming stated there are four agenda items for discussion in this meeting: <br />• Revenue assumptions, expenditure targets and major fund financial forecasts. <br />Fleming asked for Council's input on these assumptions, if they are justified or <br />overly conservative or optimistic <br />• 2017-2021 Capital Improvements Plan (CIP). <br />Fleming asked for direction on this list of projects and if it is the right mix of <br />projects and cuts. <br />• Potential Contributing Projects for 2017-2018 <br />Fleming asked for prioritization of the projects on the list. <br />• Budget Calendar <br />Revenue Assumptions, Expenditure Targets and Major Fund Financial Forecasts <br />for 2017 <br />City Manager Fleming reviewed the revenue assumptions noting there is a significant <br />anticipated decline in building revenue and associated water tap fees based on a <br />decline in building permits knowing what has been approved and is in the queue to <br />build. Sales tax is estimated to grow at 3'/2% on average. The assumption of a property <br />tax decline is the library bond issue being paid off. He stated these assumptions are <br />based on historical information. <br />Mayor Pro Tem Lipton asked if there is a corresponding reduction in expenses for the <br />years there is a decline in the assumed revenue. City Manager Fleming stated there is <br />for 2017-18 and it would be done as we budget for those specific out years. <br />Mayor Pro Tem Lipton asked if the Historic Preservation Fund Tax (HPF) is not <br />renewed, how would it affect the budget. City Manager Fleming stated that the program <br />would be cut back significantly. Councilmember Keany asked if the HPF is not renewed <br />would there be staff reductions. City Manager Fleming stated it would be a possibility. <br />City Manager Fleming noted that even though the tax revenue is increasing compared <br />to earlier years, the buying power of that money is Tess than it was in 2000 based on <br />inflation <br />8 <br />