5A Public Hearings 2020 0615 - Laserfiche WebLink

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File Number: 20-227 While the City Council adopted a balanced budget for FY 2019-2020 and an initial budget with a manageable deficit for 2020-2021, the financial impacts of the COVID-19 pandemic require action to address significant revenue loss. While exact data measuring the immediate and longer-term financial impacts on the City are limited at this time, state and national sources clearly indicate immediate and severe economic decline due to Alameda County’s Shelter in Place order, followed by recession and a slow recovery. Discussion Following the budget presentation and City Council discussion on May 18, 2020, the City Manager proposes amending the FY 2020-2021 budget to reflect revenue and expenditure changes resulting from conditions caused by the COVID-19 pandemic. The total amended General Fund revenue for FY 2020-2021 is $109,177,700, a decrease of $8,867,000 from the originally adopted budget. The City Manager recommends amended expenditures in FY 2020-2021 totaling $117,680,700. Expenditure adjustments include both expenditure reductions to offset the use of reserves totaling $5,471,700 and additional General Fund expenditure requests reviewed with the City Council on May 18, totaling $1,240,700. The adjusted General Fund revenue/expenditure gap amounts to $8,503,000-requiring the use of available General Fund reserves. Revenues The City Manager recommends revenues totaling $109,178,000 in FY 2020-2021, a decrease of $8,867,000. The General Fund tax revenue decrease related to decline in economic activity due to the COVID-19 pandemic includes Sales Tax and Transaction & Use Taxes, Real Property Transfer Tax, and Transient Occupancy Tax. The details of the projected budget revenue decreases in FY 2020-2021 are in Attachment 1 - Table 1. Expenditures The City Council Adopted Budget for FY 2020-2021 included a negative General Fund revenue/expenditure gap of $2,305,000. Projected revenue losses resulting from COVID- 19 have increased this projected gap to $8,503,000. As a result, the City Manager recommends a number of actions to significantly reduce FY 2020-2021 expenditures and minimize both the gap and the level of reserves required to balance the budget. The City Manager recommends the following six steps to significantly reduce FY 2020-2021 expenditures: ·Selective hiring freeze; ·Supplies and Services expenditure reductions by all departments; ·Reductions and restrictions in travel spending in all departments, with the exception of mandatory travel for professional certifications; ·Reduce General Fund allocations to Internal Service Funds; ·Eliminate selected General Fund financed Capital Projects; and ·Amend Fire contract budget to reflect actual expenditure level. Page 2 City of San Leandro Printed on 6/10/2020 17