Finance Highlights 2009 1117 - Laserfiche WebLink

Home

• Sales Tax -this revenue is responsive to the ups and downs of the economy and not surprisingly is falling short of projections. More specifically, San Leandro is experiencing declines in the major economic categories of Transportation, Construction, Business to Business, Food Products and Retail Sales. Based on collections through the quarter and estimates by the City's Sales Tax consultants, staff is reducing this revenue from $19.5 million to $18.3 million, an additional revenue shortfall of approximately $1.2 million. • Utility User Tax - this revenue includes Electricity & Gas, Cable and Telecommunications. The City is experiencing a decline in revenue in the Electricity & Gas account due to diminishing volumes experienced specifically by PG&E. These declining volumes may be attributed to' the overall economic stress communities are experiencing throughout Northern California. Therefore, staff is reducing this revenue from $10.5 million to $10.1 million which is commensurate with the actual revenues experienced in 2008-09, thereby producing a shortfall of $400,000. Together the reductions noted above indicate an additional revenue shortfall for the General Fund of approximately $2.0 million. The July 2009 estimated shortfall of $1.055 million plus the current estimated short fall of $2.0 million equals a $3.055 million shortfall from the adopted budget. Mid-Year Budget Review for 2009-10 Staff plans to present to the Finance Committee amid-year budget review in January/February of 2010. The mid-year budget review will look at both revenues and projected expenditures for the fiscal year, including the revenue revisions discussed above. The 2009-10 adopted budget indicates a deficit of approximately $2.9 million. If only the revenue revisions noted above were realized, then the budgeted deficit would increase to about $5.9 million. Fortunately, the City anticipates expenditure savings in 2009-10 which will help mitigate this potential revenue shortfall. For example, the hiring freeze implemented last year and continuing this year will produce cost savings for 2009-10. In addition, the City's Golden Handshake program was completed in October of this year and will generate additional cost savings for the fiscal year. This expenditure information will be incorporated into the mid-year review and will provide the Finance Committee with an updated projected net deficit for 2009-10. 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, 2010-11. Please let me know if you have any questions.