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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE: October 20, 2009 <br />TO: Finance Committee <br />FROM: Perry H. Carter, Interim Finance Director <br />SUBJECT: Budget Strategy for Fiscal Year 2010-11 <br />Background <br />Over the past several weeks, staff has had the opportunity to discuss with -the Finance <br />Committee, Council, employee groups, employees and members of the public a Five Year <br />Budget Forecast (Forecast) that was developed for the City's General Fund. The Forecast shows, <br />unfortunately, chronic deficits for the General Fund through 2014-15. <br />Concurrent with developing the Forecast, staff pursued two key "revenue measures". More <br />specifically, staff had a poll conducted in September that among other things, sought to <br />determine the level of voter support for: (1) aone-quarter percent increase in the City's Sales and <br />Use Tax for seven years and (2) a city wide Lighting and Landscape Assessment District <br />(CLAD). <br />In September, Council "kicked off' the budget process for 2010-11 at a Council Work Session. <br />In addition to reviewing the Forecast and revenue measures in general, Council discussed several <br />key budget parameters for 2010-11. Staff indicated that it would be returning to the Council <br />Finance Committee in October for further discussion of the 2010-11 Budget and possible budget <br />strategies. <br />Also, at the September 28, 2009 Council Work Session, Council discussed the possible <br />formation of a budget advisory committee. The Mayor indicated that he would discuss the <br />concept with the City Manager and return to Council with a recommendation. <br />Discussion/Analysis <br />As you have directed, staff has considered various approaches to developing the 2010-11 <br />General Fund budget. Further, you have asked that an approach be developed that would <br />accommodate one, both or none of the revenue measures being successful. <br />A quick look at the Forecast shows that the average shortfall for the five year forecast period <br />(2010-11/2014-15), including all resources/(requirements) is about $5.5 million per year. Of <br />the two revenue measures discussed above, the CLAD could raise about $2 million per year and <br />the sales tax '/4 percent about $4 million per year. Clearly, if both revenue measures ($6 million <br />