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

Browse Search

9.A. - Page 4 of 21 The FY 2020-21 Recommended Budget reflects prior City Council direction to ensure financial sustainability for the City, including paying down liabilities, and using one time funds for one time needs, however, several elements of the Recommended Budget are likely to change with Mid -Year Budget Amendments anticipated in October. Staff likely will recommend that City Council consider using a portion of the City's reserves to address short term (versus structural) imbalances. The City's General Fund reserve is intended to support City operations and has a current balance of $23.6 million, which is compliant with the City's reserve policy of 15 percent of the next fiscal year's revenues. In addition to emergency response and ensuring continuity of City operations through the pandemic, staff are exploring actions we can take to help our community thrive now and emerge more quickly from this crisis. A staff -level Recovery Planning Working Group has been established to focus on 3/6/9+ month timeframe. This work will be informed by the San Mateo County (County) COVID-19 Long -Term Strategic Plan. The Plan's intent is to help the County get to a "New, Normal." It lays out an approach for leveraging capabilities, expertise, and resources of public, private, and nongovernmental organizations to implement a focused, community -wide recovery strategy. Recommended Use of FY 2019-20 Estimated Year -End Operating Balance Over the last four months the City's projected FY 2019-20 operating position has changed dramatically. On February 24, 2020, staff presented the Preliminary Ten -Year General Fund Forecast. At that time, the economy was strong and revenues were projected to be $6.5 million above the adopted budget, including sales tax revenue that was expected to be $2.9 million higher. Based on this solid position, staff recommended $9.4 million in special one-time expenditures to address policy priorities (see Table 1). As a result of COVID-19 and its impact on the local economy, the City's financial situation has drastically changed and on April 13, 2020, staff presented a Revised Preliminary Ten -Year General Fund Forecast. The revised forecast projected a $6.1 million drop in revenue and staff recommended reducing expenditures in order to balance the current year budget. As a result, the estimated operating balance dropped from $916,000 to $7,000. The April revised forecast retained an anticipated $7.5 million in special expenditures to address policy priorities. Staff is now estimating an operating balance of $386,000 for FY 2019-20, and includes $4.3 million in special expenditures to address policy priorities. The table below summarizes the changes in recommended one-time expenditures that are funded by the projected operating balance. Page 4 of 20 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 693