AgdaPkt 2019-02-25 Joint SA PFA - Laserfiche WebLink

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8.B. - Page 14 of 122 As shown in the graph below, without any adjustments to current operating costs or revenue sources, the annual budget deficit is projected to be almost $4.0 million in FY 2022-23, and grow to approximately $18.0 million in FY 2028-29. Because of the projected deficit, the City will need to continue to explore all the strategies identified in the Financial Sustainability Plan, including operating cost reductions and revenue enhancements. The City Council Finance/Audit Subcommittee will be discussing opportunities to increase revenue in the spring of 2019, among other financial topics that are detailed in the FY 2019-20 Budget Development section below. Projected General Fund Net Operating Position (in thousands) FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 $9,000 $7,289 $6,438 $6,000 $3,000 $279 $(3,000) $(6,000) $(9,000) $(12,000) $(15,000) $(18,000) Revenue Projections $(4,052) $(6,680) E $(8,404) $U $(17,780) Actual revenues in FY 2018-19 are outpacing the adopted budget revenues. Continued growth is expected, but at a much slower pace over the ten-year period. The City's primary revenue sources are property tax (43.8 percent of revenue) and sales tax (15.5 percent of revenue). Projections for these and other revenue sources are described below. Taxes Property tax is expected to grow by nearly $1.7 million in FY 2019-20 when compared to the FY 2018-19 Adopted Budget. In subsequent years, the growth rate is expected to be approximately 3 to 4 percent as completed developments result in increased assessed valuations on improved properties. Although approval of additional development in the downtown area has slowed recently as caps established in the Downtown Precise Plan have been reached, development of this area has been robust in recent years. Typically, it will take approximately 18 to 24 months for new construction or redevelopment to appear on the tax rolls. As a result, the City will continue to see increases in downtown property tax revenues for several years as these new developments are completed, assessed, and included on City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org 240