Finance Highlights 2009 0217 - Laserfiche WebLink

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stated that we can use the funds for all these things mentioned, you want to prioritize. Hollister stated that the funds cannot be used for routine maintenance and should be used for enhancements which allow the City to accommodate increase use of the facility that is created by the expanded population. Committee Recommendation Committee recommended taking to Council for approval. 2. Discussion Regarding General Fund Preliminary Budget 2009-2010 Hollister provided a summary to the Committee explaining the decrease in revenue while the costs for running the City have gone up. The City has implemented various cast savings measures, which includes a soft hiring freeze and restriction on travel, supplies, and service expenditures. However, the City continues to have a substantial gap and therefore must reduce the budget. Staff used the fiscal year 2008-09 adopted budget as the base. Before reductions and keeping the same service levels from current year, the preliminary shortfall amounted to $11.4 million. The gap between expected revenue and expenditures for next fiscal year of $11.4 million will result to an unhealthy designated fund balance of about $300 thousand for 2009-10. Staff was directed to reduce expenditures thus was able to narrow down the shortfall to approximately $2.9 million including a $lmillion transfer from the Self-Insurance Fund to the General Fund. With the reductions comes a substantial cost in some of the programs that are provide to citizens, which includes delay in service or elimination and suspension of some programs provided in the past. Due to the economic situation the City is faced with, strategies and guidelines were developed to all departments. Staff's also looking at a 3-year Budget Strategy Plan which begins next year to work out the budget deficit situation which could last for awhile. Originally, departments were asked to reduce expenditures at five, seven, and ten percent which was not enough. City Manager Hollister has now been looking at five and fifteen percent cuts. Hollister gave directions to fire and police to do 5% cuts, which are still significant in terms ofwhat needs to be cut and with much less impact on services than if they had to cut ten percent cuts or fifteen percent cuts. Other departments were asked to reduce general fund expenditures by 15%. Every department gave their 15% budget reduction recommendation to the City Manager. Hollister spoke about the schedule that a review by departments will be delivered to the Committee and strategies that are planned. A follow-up meeting on February 24th will give the committee a chance to review the recommendations and have some discussions with department heads regarding the recommendations. Hollister stated that if there is an area that the committee disagrees on reducing then a reduction elsewhere needs to happen, in order to achieve the amount of reductions that are needed in closing the deficit gap. The plan is to bring forward today the budget recommendations to the Finance Committee and in the next two weeks be able to present to the full City Council on March 23rd a preliminary general fund budget. These are difficult cuts for the city to make, and department heads and staff made the best judgments to continue on serving the citizens of the city. Hollister mentioned that everyone is open to suggestions by council, employees, and employee groups for other places that may assist the city in reducing the deficit. 2