AgdaPkt 2020-06-08 Joint SA PFA - Laserfiche WebLink

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9.A. - Page 2 of 21 1. We are monitoring revenue closely and preserving cash flow by holding open select employee vacancies and postponing non-essential operating and capital expenditures 2. We are recommending that the FY 2019-20 budget rollover to FY 2020-21 for now, and that we return to the City Council in October 2020 to adjust expenditures when the revenue picture is clearer 3. We are developing mid- and long-term financial scenarios based on potential economic recovery patterns: our recommended strategies later this year will vary depending on depth and duration of recession 4. We are focused on "Three R's" to help our community and organization meet the challenges presented by the COVID-19 pandemic and emerge as quickly as possible: Respond to immediate community needs resulting from the COVID-19 pandemic, with particular care for seniors and vulnerable residents (timing: now through pandemic end) Restore community cultural, economic, and social vitality in partnership with community organizations and businesses (timing: now through pandemic end) Reimagine public services in light of evolving community needs and financial resources (timing: begin in spring 2021, pursue over 2-3 years) The approach to this year's Recommended Budget is not typical. We know we will face deficits related to the pandemic -induced recession. We cannot predict the depth and duration of that recession with much accuracy, however. This is not for lack of effort, but recognizes that no one can predict how human behavior will change as a result of the pandemic. Our revenues are driven by both individual and business decisions regarding property investment, employment and consumption of goods and services. Unlike prior recessions, where we could generally assume that individuals and businesses would return to prior spending levels and patterns of activity, the extraordinary nature of the pandemic completely disrupts those assumptions. Only in the months ahead will we begin to understand how our society will change in order to meet the current public health crisis. I believe we will be able to make more strategic decisions about future City services by taking a few months to begin to understand those changes, and the City Council's long history of strong financial leadership means we have the resources to do so. The City Council's practice of taking intentional, proactive, and strategic steps to ensure the long-term fiscal sustainability of the City, including adopting a structurally balanced annual budget, funding long- term needs, and maintaining a 15 percent General Fund reserve level. In addition, City leadership has acted to strengthen the City's financial position, increase transparency and enhance operating efficiencies. Recent efforts include: • Developing a Ten -Year General Fund Forecast to provide a longer-term roadmap to financial sustainability Page 2 of 20 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 691