AgdaPkt 2020-04-06 Special - Laserfiche WebLink

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S.A. - Page 8 of 21 positions, which primarily includes police and fire positions. Staff continues to access the needs of the organization during this time to determine which positions are critical to fill to support essential needs. Additional steps to manage expenditures will be taken as the financial impacts are further assessed. Updated Preliminary General Fund Ten -Year Forecast to be Presented April 13, 2020 Staff is currently preparing an updated Preliminary General Fund Ten -Year Forecast to be presented at the April 13, 2020 City Council meeting. Due to the unprecedented and ever changing economic climate, it is important to collect as much data as possible, including updated actual expenditure data, prior to developing an updated Preliminary General Fund Ten -Year Forecast. The Forecast will also provide an update on potential impacts to the City associated with investment losses now being experienced by the California Public Employees Retirement System (CALPERS). Investment income funds approximately 58 percent of pension costs, with employer and employee contributions making up the difference. As has been discussed extensively in the past, when investment revenues have fallen short, employers have been called upon to increase contributions as employee contribution levels are largely fixed. Any increases in City payment obligations will compound the already daunting task of paying down existing pension and retiree health obligations. FY 2020-21 Operating Budget Process, Guiding Principles for Budget Development, and General Fund Reserve At this time, staff is recommending to roll over the FY 2019-20 operating budget as a base budget for FY 2020-21, followed by a mid -year budget adjustment by the end of the 2020 calendar year once staff has a better idea of revenue impacts associated with the pandemic. The FY 2020-21 Recommended Budget will include updated salary and benefit costs, including cost of living adjustments already agreed to in bargaining agreements and health insurance costs. The Recommended Budget will reflect prior City Council policy direction to ensure financial sustainability for the City, including paying down liabilities, and using one time funds for one time needs. With the Recommended Budget, staff will also seek confirmation of the Council's top strategic priorities in light of the pandemic, and recommend schedules for advancing policy work. Prior timelines for many activities will be delayed as staff strive to support essential service delivery and reshape services to protect public and employee health. If necessary, as part of the Recommended Budget or at some point in the future, the City Council may be asked to consider using reserves to address short term (versus structural) imbalances. The City's General Fund reserve is intended to support City operations. The City's current General Fund reserve balance is $23.6 million and is compliant with the City's reserve policy of 15 percent of the next fiscal year's revenues. If utilization of reserves is necessary, City Council approval will be required. Staff will provide to the City Council and the public a Recommended Budget before June 1, 2020, in accordance with the City Charter. The FY 2020-21 operating budget hearing dates of June 8, 2020 and June 22, 2020 will remain unchanged. FY 2020-21 Capital Improvement Program (CIP) Budget The FY 2020-21 CIP Budget timeline, including the City Council study session on April 27, 2020 will remain unchanged. The dates of June 8, 2020 and June 22, 2020 also remain as recommended budget hearing Page 8 of 21 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 11