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8.A. - Page 22 <br /> source, though we received $4.7 million in FY 2015-16. We will know the amount <br /> for FY 2016-17 in December 2016. <br /> 3. We are attempting to make realistic revenue projections, including revenue <br /> generated by approved development proposals, but have not projected revenue <br /> reductions due to a recession. As was discussed in February, current economic <br /> conditions will not continue indefinitely and we will need to continue to monitor <br /> revenues closely. <br /> 4. On the expenditure side, the forecast includes escalation in employee-related <br /> costs based on agreements with employee groups and anticipated increases in <br /> health and pension benefit costs. <br /> 5. Additionally, several "true up" adjustments to the budget are recommended. <br /> These are modifications in light of actual expenses over the last several years, <br /> with the aim of reducing the volume of mid-year or year-end budget adjustments. <br /> Examples include: <br /> a. Workers compensation: $1.8 million (ongoing) <br /> b. General liability: $1.1 million (ongoing) <br /> c. Fire Department overtime: $1.1 million (ongoing) <br /> d. Police Department overtime: $777,000 (ongoing) <br /> e. Realign charges to San Carlos for fire service based on actual usage, <br /> increasing City cost about $175,000 (ongoing) <br /> f. Library casual hours: $110,000 (ongoing) <br /> g. PRCS Middle School Sports/PE Plus realignment: $50,000 (ongoing) <br /> h. HEART dues: $25,000 (previously funded by the redevelopment agency, <br /> dues had not been formally budgeted for the last few years) (ongoing) <br /> i. Increases for training, supplies and services: $175,000 (ongoing) <br /> Informed by this assessment, we recommend the following strategy to support <br /> City Council priorities in light of evolving economic conditions, and the need to <br /> closely match ongoing expenditures with ongoing revenues. <br /> The strategy has four phases: <br /> 1. Propose FY 2016-17 operating budget which: <br /> a. Continues current initiatives to address Council priorities <br /> b. Adjusts departments' operating budgets to reflect actual expenditures and <br /> experience over the last few years ("true up" adjustments) <br /> c. Ensures appropriate General Fund revenue is being received through a <br /> transient occupancy tax audit, and by evaluating whether development <br /> processing and other fees are set at the appropriate level to meet cost- <br /> recovery and policy goals <br /> d. Provides the following ongoing and short-term service enhancements: <br /> 22 <br />