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City Council <br />Special Meeting Minutes <br />March 31, 2020 <br />Page 4 of 11 <br /> <br />and the City is now at 63%. He noted some of the variance is from projects not completed <br />in 2019 that will need to be rolled forward to 2020. <br /> <br />Director Watson reviewed the numbers of the Open Space & Parks Fund and the <br />Recreation Fund both showing actual balances similar to the projected balances. The <br />Capital Projects Fund (CIP) shows a $5M positive variance mostly due to turnback from <br />projects that were not completed most of which will need to be carried forward to 2020. <br /> <br />Director Watson reviewed various financial downturn scenarios. He noted these are just <br />for a sensitivity analysis as we have no solid idea what the downtown will look like right <br />now. Scenarios included various ways in which small or large declines in revenue will <br />affect the budget. If the economy recovers from a downtown relatively quickly the budget <br />can sustain some declines, however, if there is a slow, elongated recovery (four-five <br />years) the impacts are much greater and cuts to expenditures would be necessary. <br /> <br />Councilmember Lipton noted the CIP gets transfers from the General Fund so the reserve <br />there is a bit overstated as it will need to help fund CIP projects meaning the reserve is <br />not all discretionary. He added the General Fund needs to be used for Open Space <br />purchases as well if that is needed. <br /> <br />Director Watson stated the main point of the presentation is that the City ended 2019 in a <br />very good financial position in all funds which makes the City relatively able to withstand a <br />2020 downturn well as long as the recovery time is short. If a recovery is drawn-out then <br />reductions will be needed in Capital Projects and operational costs. Some of the possible <br />options staff has considered include a hiring freeze (specific or broad), suspension of <br />capital projects, reductions in service levels, and wait and see taking time to define core <br />services and essential capital projects. There are many other options as well. <br /> <br />Director Watson stated for the upcoming budget process staff will consolidate a list of all <br />carry forward and scheduled CIP projects to look at a reprioritization. Staff also <br />recommends a one-year budget rather than the scheduled two-year budget for this year. <br /> <br />Public Comments <br /> <br />John Leary, 1117 LaFarge Avenue, asked how long matching funds for projects will <br />remain available if we don’t move forward with projects now. Director Watson stated <br />matching funds will be dependent on the individual projects and the other partners <br />involved. <br /> <br />Mayor Pro Tem Maloney stated we should be adding another scenario that includes two <br />waves to the downturn and a two-year recovery. <br /> <br />Councilmember Lipton noted the City should remain conservative; we can’t drain all the <br />reserves now as there will be other emergencies. No one knows what the recovery will <br />look like and how long it will take.