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9.A. - Page 13 of 21 <br />As shown in the graph below, with an "L" shaped recession, and without any adjustments to current <br />operating costs or revenue sources, deficits would occur throughout the 10 year period. The annual <br />budget deficit is projected to be approximately $10.0 million in FY 2020-21, and grow to approximately <br />$36.5 million in FY 2029-30. <br />Projected General Fund Net Operating Position - "L" Shaped Recession <br />(in thousands) <br />Z°ti9 L° L°L° N LOZtiZ7, Zp72 Z� Z�Z3 Zt 70� �� 74�-16 L4�6 <br />11 1,1.,& <br />91 <br />9 Lfl�g 613 <br />$2,000 5386 <br />${2,000} <br />$[6,000] <br />$(lo,000) <br />$(10,004) <br />$111,253} <br />${14,000} <br />${18,000} $(16,712) <br />$(22,000) S(20,240) <br />$[22,670] <br />$(26,000} <br />$(26,680) <br />$(30,000) <br />$(34,000) <br />$(38,000) <br />$(29,264) <br />$(31,716) <br />$(34,332) <br />$(36,502) <br />A comprehensive analysis of the City's Ten -Year General Fund Forecast is included as a separate section <br />of the budget document. <br />Strategies to Address Recession Scenarios <br />Depending on the depth and duration of the recession, different strategies could be employed to ensure <br />the City maintains its fiscal sustainability. Given the unforeseen and dramatic impact of the pandemic, it <br />is likely that staff will recommend some use of reserves as part of the mid -year adjustments in October <br />2020, particularly if no federal relief is provided to local agencies overwhelmed by significantly increased <br />costs and reduced revenues to support essential services. <br />The best case scenario is a "V" shaped recession. If a "V" shaped recession occurs, the City could explore <br />a combination of short-term bridge strategies, limited use of reserves, and potentially limited service <br />reductions as the downturn would be deep but the recovery could rapid. Temporary loans from Internal <br />Page 13 of 20 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />702 <br />