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DRAFT MINUTES Page 6 Cite of San Leandro Cite Council and San Leandro Redevelopment Agency Joint Meeting — January 18, 2011 Finance Director Tracy Vesely provided a summary of the information reported at the Finance Committee Meeting of December 21, 2010, including a report on the FY 2009 -10 year -end General Fund operating shortfall of $6.6 million; the adopted budget, containing considerable General Fund spending cuts; the estimated FY 2010 -11 shortfall of $2.2 million; Measure Z revenue projection of $4 million annually, beginning April 1, 2011; a slight upward trend in property tax revenue; and a slight increase in sales tax revenue due to an adjustment by the State Board of Equalization. Ms. Vesely noted that the six positions that were due to be eliminated without the passage of Measure Z were only funded through the end of last year, and would need to be funded through Measure Z revenue for the last half of this fiscal year. Ms. Vesely also reported on the Finance Committee Meeting of January 14, 2011, at which the Committee discussed the idea of a two -year budget process, beginning in 2013; the FY 2011 -12 budget assumptions made by staff, and the current $1 million General Fund operating deficit. Staff responded to questions from the Council. In response to a question from Councilmember Starosciak, Mr. Hollister outlined the plan for expenditure of the Kaiser community mitigation funds. Mayor Cassidy noted the budget assumptions would have tremendous consequences, and suggested that they be reviewed by the entire Council at its upcoming retreat. He asked that the Finance Committee continue its consideration of the biennial budget process. Mr. Hollister indicated that staff would incorporate budget forecasting into the 2011 -12 budget document, and confirmed that the biennial budget process would be brought back to the Committee for further consideration and possible adoption for use beginning in FY 2013. 2. Governor's State Budget. Ms. Vesely prefaced her presentation by stating that the City's budget assumptions did not take into account any of the current budget actions proposed by the state. She gave a PowerPoint presentation, outlining the Governor's budget proposals, including budget cuts, extension of state taxes due to expire in 2011, revenue proposals including taking local redevelopment funds, and realignment of state programs to county and local agencies. Business Development Manager Cynthia Battenberg continued the presentation, describing the Governor's proposal to eliminate redevelopment agencies, and the possible impacts of the proposal on San Leandro. Staff responded to questions from the Council. 3. Matter of Opposition to State Tax Realignment.