City Council Study Session Agenda and Packet 2009 08 11

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PAGE THREE SUBJECT: OPTIONS FOR REDUCING THE GAP BETWEEN GENERAL FUND REVENUES AND EXPENDITURES DATE: AUGUST 11, 2009 Staff Recommendations. Based on Council's direction, the City Manager worked with the Department Directors and staff to prepare the attached list of 87 budget options. The list of actions is categorized into three priority levels: A: Staff recommends taking this action now B: Staff recommends taking this action in 2010 C: Consider this action at a later date if necessary D: Staff considered this and recommends against taking this action The list is also sorted to show the items in descending dollar amounts so Council can focus on those items that have the larger dollar impact first. Implementing all the Priority A actions would reduce the General Fund shortfall by just over $300,000 in 2009 (assuming September 1, 2009 implementation) and just under $800,000 for the full year of 2010. The combined impact of implementing the Priority A and B items would reduce the General Fund shortfall by about $1.5 million annually (this figure does not include additional revenue if voters approved a residential building use and /or consumer use taxes). The following graphs illustrate how these actions would change the General Fund Forecast. Illustration A shows the forecast of the General Fund fund balance if we don't take any action to bring expenditures back in line with the lower revenues we are now experiencing: Illustration A 20,000,000 15, 000, 000 10, 000, 000 5,000,000 (5,000,000) (10,000, 000) General Fund Forecast If No Action is Taken To Reduce Expenses or Increase Revenues Post Office Acquisition One -Time &ants Transfers tl Revenue Expenditures Fund Balance -M Inimum As the chart indicates, the fund balance drops below our minimum target level (15% of expenditures) in 2011 and then continues sharply down from there.