Finance Committee Agenda and Packet 2020 06 23

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City Council Finance Committee Meeting Minutes 05/19/20 Page 3 of 7 and staff discussed that any revenue impacts from such reductions would not occur until 2022, but would be monitored. The Finance Committee and staff discussed various recovery curves that could be used for financial projection modeling. Finance Committee Member Lipton stated that the State of Colorado is using a "Square -Root" curve for its projections, which is a steep decline followed by 9-months of slow recovery back to normal pre - pandemic levels. Member Lipton suggested the City follow the State's model, but update the City's projections quarterly. Member Lipton also stated the City should develop a worst -case model that would utilize a "W" curve. Finance Committee Member Leh agreed. This model would anticipate another outbreak event occurring in fall 2020, and would be a more conservative model. Finance Committee Members and staff discussed that the State's fiscal year is July -June, while the City's fiscal year is a calendar year. This means the "Square - Root" method the State is employing anticipates recovery for Summer 2021, but for the City, which budget is on a calendar year, would anticipate recovery the beginning of 2021. Members and staff discussed that the City may be more exposed to certain revenue declines than the State, that there are still many unknown variables, and that until a widely available vaccine is available, full recovery may not be realized. Member Lipton stated he would support over - reducing the budget now and adding programs and funding back in should the trend improve. City Manager Balser asked the Finance Committee Members if they were in agreement with the Financial Principles and Actions and targeted budget reduction percentages provided, and what level of fund balance reduction should be considered for the General Fund, Open Space & Parks Fund, and the Recreation Fund. City Manager Balser asked the Finance Committee for direction related to the target percentage expense reductions, and which budget scenario previously presented by Director Watson, should be used by staff in making its operational budget recommendations. Finance Committee Member Lipton stated he would recommend using scenario 1 or 1 a as presented on March 31. Finance Committee Chairperson Maloney requested staff proceed using a deep "Square -Root" curve, but develop a "W" curve revenue model that could be utilized should revenue declines continue for 2-3 consecutive months. Finance Committee stated that a high-level model is needed for City Council to look at major revenue and expenditure categories. Members stated such a model could be used, and worked on together, by staff, Finance Committee, and City Council.