AgdaPkt 2020-10-26 Joint SA PFA - Laserfiche WebLink

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8.A. - Page 14 of 104 Transmittal of the Fiscal Year 2020-21 Recommended Revised Budget October 26, 2020 Honorable Mayor Howard and City Council Members: I am submitting a Revised Fiscal Year (FY) 2020-21 City of Redwood City (City) Budget (Revised Budget) for your consideration and adoption on October 26, 2020. The Revised Budget proposes a reduction in expenditures of $7.7 million from the FY 2020-21 Adopted Budget, including a reduction of $6.3 million in the General Fund. On May 4, 2020, the City Council conceptually approved a financial and community recovery strategy in response to the COVID-19 crisis, which served as the foundation for my June 8, 2020, submission of the Fiscal Year (FY) 2020-21 City of Redwood City (City) Revised Budget which you considered on June 8, 2020, and adopted on June 22, 2020 (Adopted Budget). At that time, staff recommended that the FY 2019-20 Budget roll over to FY 2020-21, and that staff return to the City Council in October 2020 to adjust expenditures when the revenue picture is clearer. This approach was possible due to the City Council's history 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. The City's strong past practices have positioned the City well in this period of unprecedented challenges. The Revised Budget continues the City's longstanding practices to support the City's financial health, while striving to address critical needs in light of the COVID-19 pandemic, to advance multi-year City Council priorities, and to focus on equity and sustainability While long-term forecasts remain muddied by a chaotic year, we now have a clearer perspective to revise our budget for the remainder of the current fiscal year and to refine our strategic direction for the next few years. The economic forecast for Redwood City continues to suggest budget reductions are necessary now and will be required for several additional years. The national economy is anticipated to experience an exceptionally sluggish recovery, and state and local governments are expected to lag considerably behind the overall economy. In addition, forecasts for the pandemic indicate a high likelihood of worsening public health conditions this winter and that the pandemic will have health and economic impacts for at least two years. A more detailed discussion can be found in the Economic Overview and COVID-19 Forecast section. The Revised Budget continues the City's longstanding practices to support the City's financial health, while striving to address critical community needs in light of the COVID-19 pandemic, to advance multi- year City Council priorities, and to focus on equity and sustainability. In the last two years the City has developed 10 year forecasts, which are particularly helpful for identifying the impact of trends over time. This longer view is important in times of crisis, allowing the City to plan thoughtfully and avoid abrupt service impacts to the community. With the Revised Budget, BUDGET MESSAGE A3