Finance Highlights 2010 0127 - Laserfiche WebLink

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Mid-Year Budget Review for 2009-10 The continuing negative news with respect to General Fund revenues is some what off set by additional cost savings measures which are being implemented for 2009-10. As can be seen in column (5) the General Fund is experiencing savings in the categories of Salaries and Benefits, Services and Supplies and the Fire Services Contract. The savings from budget is approximately $2.8 million. More specifically, staff implemented earlier this year a Golden Handshake program which closed October 31 of last year. A review of the Golden Handshake program indicates that the General Fund will save approximately $500,000 for the balance of 2009-10. This cost reduction is included in the January Update column. In addition, there is a possibility that a furlough of one day per month (assumes 6 days for 2009-10) will be implemented for the balance of 2009-10. Staff estimates that this will result in a savings of approximately $400,000 and this information is included in the January Update column. In addition to the Salaries and Benefits cost savings for 2009-10, the General Fund is reducing costs in the categories of Services and Supplies and the Fire Services Contract. Based on current expenditure trends and information from the various departments The General Fund will save approximately $750,000 and $160,000 in these two categories. Also, a review of the Capital Improvement Projects fund (C1P) and the Gas Tax fund indicates that contributions could be reduced by $100,000 and $200,000 respectively. Schedule A reflects these adjustments. Finally, the City Manager has directed all Department Heads to review their General Fund budgets to see what additional savings can be realized during the balance of this year. These savings would be in addition to the savings noted above, however, there might be significant impacts to service levels or programs. The City Manager plans to discuss these measures with the City Council at the upcoming Council retreat which is scheduled for end of January. Summary In brief, the City continues to weather significant revenue reductions. There is no guarantee that the downward trend will not continue. If the estimated revenues and expenditures as shown in the attached schedule come to pass, then the General Fund will sustain an operating loss of approximately $7.3 million for 2009-10. This deficit, coupled with the General Fund beginning fund balance of $10.1 million and loan payments of $1.1 million (which are credited directly to fund balance) will result in an ending Designated Fund balance of approximately $3.9 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, 2010-11. Please let me know if you have any questions.