Finance Highlights 2008 0917 - Laserfiche WebLink

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ATTACHMENT C CITY OF SAN LEANDRO MEMORANDUM Date: April 3, 2008 To: John J. Jermanis, City Manager From: Perry Carter, Interim Finance Director Subject: GENERAL FUND REVENUE OPTIONS BACKGROUND AND DISCUSSION: In March of this year the City Council established an Ad Hoc Committee to explore several issues, including General Fund revenues. The appointment of this committee was in part a response to the immediate financial challenges facing the City as well as planning for long term financial stability. Specifically, the City's General Fund is facing a $3 to $4 million operating deficit in 2007-08 and a potential $6.4 million operating deficit for 2008-09. Forecasts for fiscal years 2009-10 and 2010-11 indicate a structural deficit in excess of $5 million for each year. These shortfalls are due to a general economic decline as well as significant declines in both the local and national housing markets. The attached schedules, A and B, summarize the General Fund's revenues, expenditures, and fund balance for 2007-08 through 2010-2011. In earlier budgets, particularly 2004-05 and 2005-06, the City struggled with declining revenues. In response, the City enacted several cost cutting measures along with revenue enhancements to balance the budgets. For example, the City updated the Business License Tax (Measure 1) in June 2006, which generates approximately $2.0 million annually. Also approved at that time was a new solid waste franchise fee on solid waste/refuse disposal. In December 2004, the City enacted a 911 Communications Access Fee, which generates approximately $2.5 million annually. Finally, the City brought forward a city-wide Public Safety Parcel Tax (Measure DD) which failed on the November 2004 ballot. If approved this tax would have generated approximately $3.5 million per year.