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i 47 9 Agencies, which includes in-lieu taxes and State Gasoline Tax, a down- trend is reflected primarily because of the smaller population for the City, and State funds are distributed on the basis of population; that in-lieu tax will not be as great because of reduction in automobile sales, and that these factors may have a serious effect on the Public Works budget requests for next year. Continued discussion related to the fact that property tax figures shown may change because what the State may decide to do is not known; that real estate sales have slowed down, affecting the assessed valuation figures; that permit fees for commercial construction is expected to remain about the same as this year. Mr. Ference referred to a large chart reflecting the information in the exhibits attached to his report, and in particular was requested to comment on Exhibit III , Comparison of ftwe General Governmental Programs, 1980-81 Budget and 1981-82 Estimated Budget. Referring to the figures for Net General Governmental Programs, he stated that the projected increase in costs was based on anticipated inflation of 12.5%. He reviewed the figures under Financing General Governmental Budget, which when deducted from Estimated General Fund Reserves at July 1, 1981, would leave a Reserve before State Revenue Loss of $1,644,970. If the estimated revenue of $1 million from the State fails to materialize, the balance would be only $644,970. He emphasized that these figures are preliminary at this time, and are based on trends. Mr. Fales noted that since Proposition 13, municipalities no longer have the ability to forecast financially; that this ability was taken away from all cities, counties, special districts and school districts, and that until the legislature comes up with a permanent formula, those agencies have to live from year to year. Brief discussion followed in which it was noted by Council that had it not been for the budgeted Reserves, there would have to be some very drastic adjustments made this year. In response to questions by Council, Mr. Ference restated the fact that these estimates are preliminary only, and that the departments will be receiving budget instructions to first, prepare their budgets on the same level of service as for 1980-81, and if the request is for an in- crease in the level of service, that increase should be requested separately; and second, in the event that in the next two or three months things look bleak, they may be asked to make a priority list showing where they can recommend reducing services in their departments. City Manager Fales added that this procedure is similar to last year's, and that it is expected that the City will be able to maintain an adequate level of service next year. Joint Meeting - City Council and Library Board Mayor Biagi confirmed that it is the consensus of Council that a joint meeting of the City Council and the Library Board of Trustees will be held on Tuesday, March 24, 1981, at 7:30 p.m. in the Schaberg Branch Library. Adjournment Upon motion duly made, seconded and carried, the Council adjourned at 12:50 p.m. to an Executive Session on Monday, February 23, 1981, at 4:00 p.m. in the office of the City Manager. FRANCES I. REGGETTS Deputy City Clerk Adj.Mtg. 2/21/81 Page 9