City Council Agenda and Packet 2023 07 18 SP

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SUBJECT: 2024 BUDGET DEVELOPMENT PROCESS DATE: JULY 18, 2023 PAGE 3 OF 3 :III DIM =1Kell] 117=141►1x+y The Finance Department facilitates budget development, in coordination with the City Manager's Office. Department Heads are asked to submit operational and capital project requests with the following budget guidelines in mind: • The City is developing the second year of the 2023-2024 biennial budget process, and therefore minimal, if any, modifications are anticipated to Department previously projected 2024 budgets. • Budget prioritization is given towards functions and programs we are currently performing over adding new services/programs/amenities. • One-time funding, if available, should fund one-time expenditures, not on -going expenditures. While our legal requirement is a balanced budget, our goal it as a structurally balanced budget, where annual recurring revenue will be projected to equal or exceed annual recurring expenditures for each fund. • Directors are expected to review all of their operations, programs and projects and to identify any potential cost savings. • Line -item adjustments should be based on analysis and projections, not simple percentage increases. • Any new staffing requests should include detailed and specific information defining the need for the position(s). • Given existing and potential fiscal challenges, the community's expectation for a high level of service delivery, and the significant level of capital project expenditures within the 6 Year CIP Program, we expect the budget development process to generate challenging conversations and difficult decisions. FISCAL ISSUES WITH SIGNIFICANT IMPACTS TO 2024 BUDGET DEVELOPMENT • The Marshall Fire continues to have a significant impact to our current and future fiscal position, with emphasis on mitigation and increased resiliency. • Property Tax Revenue and Assessed Value Discussion — City General Obligation Mill Levy. • O/S and Park Sales Tax / Ballot Measure (Pass/Fail) and New Accounting Treatment. • General Trend of Expenses outpacing Revenues. CITY COUNCIL COMMUNICATION 5