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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE: April 24, 2006 <br />TO: Finance Committee <br />VIA: John Jermanis, City Manager <br />Steve Hollister, Assistant City Manager <br />FROM: Jesse Baloca, Finance DiIrectof <br />SUBJECT: Fiscal Year 2006-07 Budget Planning and Discussion <br />Following a review of year-to-date 2005-06 activity, the City anticipates an operating shortfall of <br />approximate $1.3 million, as opposed to the $3 million estimated almost a year ago. The <br />reduced shortfall primarily reflects a projection that overall revenues will end the year at 2.9% <br />above the FY 2005-06 budget projections along with an estimated expenditure savings of 1.4% <br />from current appropriation levels. The July 1, 2006 General Fund balance available for the new <br />FY 2006-07 Budget is currently projected at $12.9 million, remaining relatively the same as <br />beginning FY 2005-06. <br />Earlier in the fiscal year, the City also received a one-time loan repayment of $1.38 million from <br />2003-04 vehicle license fee money borrowed by the State. The loan repayment, which was <br />repaid a year in advance, will be used to offset the current operating deficit of $1.3 million. <br />FY 2005-07 General Fund <br />At this time, the Proposed Budget is balanced based on the following expectations for revenues <br />and other resources for FY 2006-07: <br />Revenues Increase by 6.6% or $4.5 Million <br />• Anticipation of new revenues include $2 million from the passage of the June 6, 2006 <br />Business License Tax increase proposal and approximately $500k in new franchise fee <br />revenues on Oro Loma recycling and disposal services; <br />• The new Red Light Camera Program is conservatively projected to generate $500k in <br />revenues and recover the cost of expenditures; <br />The City's two-year obligation to contribute $1.2 million in property tax to the State, as a <br />result of Proposition IA, will end and become available to fund FY 2006-07 City <br />operations; and <br />• Projected growth from unsecured property tax of 7.5%, sales tax of 2.5%, and utility user <br />taxes and franchise fees ranging from 1 % to 4%. <br />