Finance Highlights 2009 0421 - Laserfiche WebLink

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• Property Tax—once considered a "stable" revenue source the ongoing economic downturn is taking its toll on this important city revenue. In March of each year the City receives an estimate of property tax revenue from the County of Alameda. Staff has received the current year's estimate and the news is not good. Based on the County's estimates and the City's prior experience, staff is estimating that this revenue source will fall short of budget by another $200,000. Consequently, staff is reducing property tax revenue for 2008-09 to $16.8 million. Utility Users Tax—the Utility Users Tax (UUT) is collected on gas, electric and cable services. Remittances for gas and electric use, while meeting target during the first half of the year, have shown declines starting, for the most part, in February of this year. Based on this trend staff is reducing the overall revenue estimate by $200,000 for 2008- 09 from $10.5 million to $10.3 million. Expenditures: In addition to reviewing revenues, staff has also reviewed expenditures through the third quarter and it appears that savings are developing in several categories. In particular, Salaries and benefits may come in under budget by approximately $1.6 million. The primary reason for this savings is the "soft" hiring freeze implemented by the City Manager earlier this year. Similarly, a curtailment of certain expenditures such as travel and training is contributing to a savings in the Supplies and Services categories of some $602,000. Finally, the Fire Chief indicated at his last quarterly review of the fire contract that a savings of approximately $127,000 would be realized in 2008-09. Together these savings amount to approximately $2.3 million and partially offset the revenue reductions discussed above. Unfortunately, revenue declines continue to outpace expenditure savings and the General Fund is now projected to have a deficit for 2008-09 of approximately $8.0 million. Staff will continue to monitor all revenue sources in the upcoming months, particularly for the General Fund, and assess any impact both to the current year and the upcoming budget year, 2009-10. Please let me know if you have any questions.