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I I I 'I - Director Ponty explained that a Public Hearing and introduction of the proposed Budget Ordinance would be held on July 27, 1998. He said, "Overall the economic circumstances in which these Budgets have been prepared, are as robust as we have seen in the last ten years, as evidenced by the local unemployment rate in San Mateo County under 2.5% for practically all of the last twelve months." Director Ponty said that as a result, there were "healthy increases in practically all of our revenue sources, property tax, sales tax, and the Transient Occupancy Tax. We should keep in mind, however, that we are not immune from the business cycle, and that boom periods turn quickly to bust periods, as we saw in the early 1990s." Director Ponty referred to Pages Roman Numeral 9 through 11 of the Budget Report, which described the Council's priorities and objectives and how the Departments had built their Budgets on that foundation. Director Ponty said major Council priorities included the "six police officers, three sergeants, two dispatchers, and three community service officers that were approved in December, 1997...." A full year of staffing through overtime for the Fire Station in Redwood Shores; the Citywide Paramedic program, start up costs and operating costs for each of the next two years, and finally staffing the Sandpiper Park Community Center and maintenance of the new parks in Redwood Shores." Director Ponty said that all of the Fund categories in the proposed Budget were balanced, and the Redevelopment Agency Budget would be presented on July 6, 1998. - Director Ponty used seven overheads to show the remarkable consistency between the percentage of revenues and expenditures in1993/94 and 1998/99. He said the two primary sources of financing for the General Fund continue to be sales tax and property tax: "Five years ago they were practically even (29% and 28% respectively.) Now sales tax is moving up approaching one-third of the General Fund financing and property tax is dropping down approaching Yo (31% and 26% respectively.)" Director Ponty said most of the other revenues have been fairly stable with the Transient Occupancy Tax and Property Transfer Tax increasing slightly, "reflective of a very robust local economy." He showed that in 1993/94 police and fire were slightly less than half of the General Fund expenditures and in 1998/99 they are slightly more than half. He described the increase in Parks and Recreation expenditures. Director Ponty said, "By and large there haven't been real dramatic changes, our expenditure patterns and trends tend to be remarkably consistent as well as the revenues." In response to Mayor Howard's questions regarding why Public Works Services is shown as only one percent of General Fund expenditures, Director Ponty explained that only one percent of the Department's activities were funded through the General Fund, and the rest were funded through Enterprise Funds, and Special Revenue Funds, such as the Gas Tax and Traffic Safety Fund. He said if the Department needs additional funding, funds were transferred out under the "Transfers Out" category established at 6% in 1993/94 and - remains 6% for 1998/99. BUDGET STUDY SESSION MINUTE BOOK NO. 57 JUNE29,1998 MINUTES Page No. 007 PAGE 3