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7 time without qualifying it by saying that it will be reviewed every six months and updated on that basis . He also stated that the forecast is predicated on trends . City Auditor-Accountant Jack Ference presented the forecast stating that it was also based on six assumptions which he had to make , as follows : ( 1 ) The current economic recession will not continue past 19 71 ; ( 2 ) The demand for additional housing will be at past levels , and the supply of money will be available to meet this demand ; ( 3 ) Redwood Shores area will develop at previously predicated rates , adding to the population of the city ; ( 4) The inflationary trend of the 1950 ' s and 1960 ' s will continue , and this trend will affect prices of both wages and goods ; ( 5) The services performed by the city will be continued at their present level ; and ( 6 ) In making the estimates , no consideration was given to the effect that new revenue sources or increased rates in other than property tax would have on the fiscal position of the city . The study does not take into account any capital improvements which would have to come from year-end balances , additional revenues , increased tax rates and/or bond issues . Changes in conditions , either local or national , could well affect the estimates . The estimates contemplate that for all practical purposes the maximum general purpose tax rate will be reached in 1974-75 fiscal year . In addition to changing the level of service to the community , it will be necessary that the revenue picture be changed either by adding new sources of revenue or raising rates on current revenues . Program budgeting is recommended rather than the present line item budgeting in order that a balance be maintained in the services rendered by the City . Further study of program budgeting is necessary to determine the degree of sophistication desirable and the legal problems which may be encountered in adopting a program budget . Revenue studies are needed to determine that rates are current and that proper collection enforcement methods are being made . Both program budgeting and revenue studies should be made at Staff level prior to Council review , but should be given high priority if the City is going to meet the service needs of the citizens . The five-year projection which is based on current revenue sources indicates at this time that in 1971 -72 there will be a deficiency of $ 174 , 000 which will require a tax increase next year of approximately 11$ . In 1972 -73 there will be a $470 , 000 deficiency (not cumulative ) which will require a tax increase of