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COUNCIL COMMUNICATION <br />TO: MAYOR AND CITY COUNCIL <br />FROM: MALCOLM FLEMING, CITY MANAGER <br />DATE:FEBRUARY 9, 2010 <br /> <br />SUBJECT:ADDRESSING CURRENT AND LONG-TERM FINANCIAL ISSUES <br />FACING LOUISVILLE <br />ORIGINATING DEPARTMENT:CITY MANAGER <br />SUMMARY: <br />The City Council approved the 2010 Budget on November 2, 2009. On January 10, 2010 we <br />learned that the Louisville Sam’s Club was closing (along with 10 other locations across the <br />U.S.). Sam’s closure is expected to reduce revenue to four funds that receive sales tax revenue <br />as follows: <br />•General Fund - $500,000 <br />•Capital Projects - $250,000 <br />•Conservation Trust - $93,000 <br />•Historic Preservation - $30,000 <br />It is important toconsider this impact in the context of other variables that have affected or may <br />affect the City’s revenues and expenditures including: <br />•The impact of cost cutting and revenue enhancing actions approved by Council and <br />implemented by staff in 2009 and the additional savings from all departments minimizing <br />expenditures in 2009 <br />•The likely revenue generated by the ConocoPhillips development <br />•The time it may take for a new retailer to occupy the now vacant Sam’s Club facility and <br />the level of sales tax that may be generated by a new facility <br />The attached presentation materials show the potential impact of these different variables on <br />projected revenues, expenditures and fund balance for the General Fund, Conservation Trust- <br />Land Acquisition Fund and the Capital Projects Fund. The Fiscal Impact Study submitted by <br />ConocoPhillips with their development proposal indicates that the facility would have a <br />significant one-time impact on General Fund, Capital Projects and Conservation Trust Fund <br />revenues as well as positiveongoing property tax revenues to the General Fund. However, the <br />long-term trends indicate that without reducing ongoing General Fund expenditures or <br />increasing ongoing revenues, anticipated revenues will not be sufficient to cover expenditures <br />required tosupportthe current level of services. <br />SUBJECT AGENDA ITEM <br />ADDRESSING CURRENT AND LONG- <br />TERM FINANCIAL ISSUES FACING <br />7A <br />LOUISVILLE <br /> <br />