City Council Minutes 2020 06 09 SP

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City Council Meeting Minutes June 9, 2020 Page 2 of 3 Sales Tax Administrator Penney Bolte reviewed the current revenue numbers. Year to date numbers are up slightly for sales tax but down for most other revenue areas. April numbers show decreases across the board compared to April 2019. She reviewed the various reports for tax revenue by area and by industry. The Monthly Revenue by Industry report for April 2020 indicates gains for Grocery, Building Materials, Finance/Leasing, Furniture and Automotive and declines across other sectors. There were steep declines in food/beverage and services (particularly lodging) due to COVID 19 closures. She noted increases in outside city sales and telecommunications also due to COVID 19. Councilmember Lipton asked why the building use tax numbers are so high. Director Zuccaro stated that increase is largely due to two large projects in CTC that have pulled permits. Public Comments — None. DISCUSSION/DIRECTION — UPDATED 2020 REVENUE PROJECTIONS Director Watson stated the last time we discussed revenue projections was March 31 at the beginning of the COVID shut down. Since then staff has reviewed all revenue accounts citywide. Those reviews confirmed there will need to be cuts for the remainder of 2020. Director Watson noted that previously sales tax projections were at a 23% reduction but that has been upgraded to a 15% reduction. The projections for some of the other revenue sources have been increased however. Director Watson noted these projections show full recovery in the fourth or fifth year. The projections also don't assume any changes in property tax. He noted the General Fund gives annual payments to the Open Space & Parks Fund and the Recreation Fund, so all the funds are intertwined. The projection for the General Fund shows a reduction of $2.5M for 2020. Staff is already working on cuts to expenditures and operations for 2020. Director Watson stated staff is asking Council to consider spending approximately $1.7M from the reserves in these funds to cover costs to keep from deeper cuts to services. He showed how much each fund has in reserve noting each is well above minimum requirements and also well above the Council's target balances. Public Comments — None Mayor Pro Tern Maloney stated he is not comfortable reducing the funds to their minimum levels as we don't know what the future holds; there may be more waves of the virus or other issues we need to be prepared for.