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Minutes - San Leandro City Council Meeting - June 7, 1993 Page - 13 - PUBLIC HEARINGS (continued) Council Member Faria asked what options, other than the utility tax, staff had in mind. Mike Oliver, City Manager, said he would expect that the City Council would want to go back to the Task Force recommendations. He said the Task Force prioritized the recommendations, and these fell below the line. He said, without any other mechanism in place, staff would assume this is what the Task Force and the community recommended and would come back with programmatic reductions. He said staff itself would not recommend these reductions, but these are what the Task Force saw. Mr. Jermanis said the State .has systematically removed about $700,000 annually from the City. He said the property tax loss is a permanent reduction, and the Utility Tax would be a permanent solution. Council Member Kerr asked, if the State takes more than $1 .5 million, would the utility tax become effective the month after passage of the State budget. Mr. Jermanis said it would. He said it would not terminate until the City Council took action to change it. Council Member Kerr asked how the City would know if sales tax revenue decreases. Mr. Jermanis said he will know after the close-out in August or September. He said he would expect to implement the utility tax based on a sales tax loss, only as a safety measure. Council Member Kerr asked if the utility tax would be stopped if sales tax goes up. Mr. Jermanis said staff would come back to the City Council . Council Member Corbett asked if the earliest implementation would occur when the State budget is passed. Mr. Jermanis said "yes," the State budget would be adopted by September; and the City will know about the property-tax shift. He said sales tax would be more delayed and would be based not on the 1992-93 close of books, but on the projection after that. He said this is a safety mechanism if sales tax continues to decline in 1993-94. He said the Council could rescind the utility tax at the end of 93-94. Council Member Faria asked a number of questions related to sales tax and how the level is calculated. Mr. Jermanis said, at this time last year, sales tax was almost $400,000 less than the preceding year. He said it could still be as much as $600,000, and that is why the Contingency Reserves were restored. Council Member Myers asked if the trigger is the 93-94 taxes over the 92-93. Mr. Jermanis said, if the closeout is $12.2 million, it triggers the Ordinance. Council Member Faria said the City did not know the sales tax for the last quarter of the fiscal year and asked how we could get a better handle. Mr. Jermanis said the Christmas season was flat, and what happened in January and February is crucial . He said last-quarter information will be available no later than October.