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9.A. - Page 10 of 17 <br />growing pension contributions, and allows for the restoration of some of the budget and service <br />reductions that were included in the FY 2018-19 Adopted Budget. <br />On December 3, 2018, the City Council approved restoration of budget and service reductions totaling <br />$2.7 million, which include the restoration of Police staffing and Library hours. In addition, the <br />recommended reductions of $2.2 million that were originally set to be implemented in FY 2019-20 have <br />been eliminated and are not included in the FY 2019-20 Recommended Budget. <br />Ten -Year General Fund Forecast — Net Budget Position <br />This the first time that the City has prepared a Ten -Year General Fund Forecast (Forecast); in prior years, <br />the forecast was a five-year timeframe. Staff believes that a ten-year forecast is prudent and assists in <br />providing a long-term road map to guide the financial planning of the City as it addresses rising pension <br />costs and unfunded liabilities. <br />The Ten -Year General Fund Forecast contemplates an economic downturn occurring within FY 2020-21, <br />and when combined with rising mandated pension contributions, a budget deficit is projected to begin <br />in FY 2021-22 and increase annually over the Forecast timeframe. <br />A comprehensive analysis of the City's Ten -Year General Fund Forecast is included as a separate section <br />of the Recommended Budget Document. <br />As shown in the graph below, without any adjustments to current operating costs or revenue sources, <br />the annual budget deficit is projected to be almost $1.0 million in FY 2021-22, and grow to approximately <br />$18.0 million in FY 2028-29. <br />$6,000 <br />$(6,000) <br />$(12,000) <br />$(18,000) <br />Projected General Fund Net Operating Position <br />(in thousands) <br />VA TO �0 V11 101 �1 Fq 1.01 �L 0 TQX y3 0 VIL, Z� � 1,10 <br />7, <br />a 75 � 1 <br />01 L6 � TOX 7.01 ZS � T4,y$ y9 <br />$5,234 <br />$3,932 <br />� 1 <br />- T <br />$[945} <br />$[5;1fi6r <br />%8,1461 <br />$(9,859) <br />$(11,986) <br />$(13,970) <br />$(16,296) <br />$(17,850) <br />Because of the projected deficit, the City will need to continue to explore all the strategies previously <br />identified in the Financial Sustainability Plan adopted in FY 2017-18, including operating cost reductions <br />nooppop- <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />642 <br />