AgdaPkt 2003-03-10 - Laserfiche WebLink

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��p �. n g REPORT , TON HonorableiaSor�i CitX Council From tCii City Manager March 10, 2003 Subject Fiscal Year 2002/03 Budget Reductions Recommendation Approve the general fund budget reductions for fiscal year 2002/03 that have been submitted by the City Manager. Background On February 3 the City Manager and Finance Director apprised the City Council of the city's general fund financial situation and provided the council with a strategy to deal with the anticipated deficits. Based upon the most recent information available, staff anticipates an operating deficit of at least $3.5 million this fiscal year. This deficit is driven primarily by declines in the City's sales tax and transient occupancy tax revenues. Council unanimously approved the City Manager's recommendation to identify savings of at least $1.2 million (1/3 of deficit) and to rely upon reserves for financing the balance of $2.3 million (2/3 of deficit) of this year's shortfall. Staff will also present to Council a recommended guideline for reductions in FY 2003/04 under separate staff report on March 10, 2003. Each department head was requested to either reduce their general fund budget by 2% or increase general fund revenues by a like amount. The department heads submitted their proposed budget reductions as directed by Friday, February 14. A budget review team consisting of the City Manager, Assistant City Manager /Finance Director, Assistant to the City Manager, and Public Works Services Director reviewed each of the proposals and now submits these proposals to the Council. A summary of the more salient proposal reductions along with the attendant service level impacts follows. A detailed list of all recommended reductions is also attached for your review. Staff is requesting conceptual approval of these reductions. Any reductions approved by Council will then be brought back to Council in the form of an ordinance for formal action. Alternatives The City Council may accept any or all of the recommended reductions. To the extent that Council removes any reductions without making reductions (or increases in revenue) elsewhere of a like amount, this year's projected operating deficit will increase (i.e. reserves will be drawn down more quickly). Fiscal Impact - The proposed reductions represent 1/3 of the projected operating deficit for fiscal year 2002/03.