Laserfiche WebLink
May 5, 2020Finance Committee Minutes <br />fund balances. For the current FY 2019-2020, the projected deficit is approximately <br />$7.2 million with $34.4 million or 30% in unassigned fund balances. For 2020-2021, <br />the projected deficit is approximately $11.0 million with $22.2 million or 18% in <br />unassigned fund balances. A forecast of the GF shows a recessionary model. It is <br />estimated that over a five-year period the City will be experiencing a loss of <br />approximately $40.0 million due to COVID. <br />Ms. Warmerdam shared a list of solutions addressing the financial impacts of COVID <br />by way of reducing expenditures. The following solutions were recommended: <br />selective hiring freeze, elimination of non-essential travel and training, reduction/delay <br />of GF contributions to specific CIPs, reduction of internal service funds contributions, <br />annual contract savings from ACFD, and a 5% reduction of departmental services & <br />supplies. After implementation of cost-savings solutions, it is recommended that the <br />balance of the deficit would then be filled by reserves. <br />Ms. Warmerdam shared a snapshot of all the fund balances. Long-term deficits were <br />already known about prior to COVID making the pursuit of RPTT important. This fall <br />the potential to increase RPTT would yield approximately $3.5 million with a $9/$12 <br />split based on a $2.0 million assessment value. <br />Ms. Warmerdam shared a list of Budget Revisions that amend the 2nd year of the <br />biennial budget FY 2020-21. Department heads were asked to make adjustments in <br />light of COVID, so the total requests of GF and other funds have been reduced <br />significantly. <br />Councilmember Lee mentioned it is better to understand what the short and long-term <br />impacts are. Mr. Lee inquired about the projections for property tax and RPTT. Ms. <br />Perini confirmed that projections are based on the numbers from the County <br />Assessor’s Office. Mr. Lee also mentioned the possible loss of funding sources such <br />as CDBG, with concern for potential greater impact on the underserved population. <br />Director Liao stated that CDBG has been relatively consistent in the last 15 years, and <br />a slight increase in the amount of $60,000 was received this year. Mr. Lee stated that <br />he is in support of all the recommendations. <br />Ms. Warmerdam mentioned that the process involved examination of conditions during <br />recessions going back to 1999. <br />Councilmember Hernandez inquired about any opportunities for long-term investments, <br />such as re-negotiating long-term bond debt and whether an aggressive approach for <br />investments makes sense. Ms. Warmerdam stated that despite the economic <br />downturn, the value of the City’s major investments has not changed much, aligning <br />with the City’s goal to take a conservative approach with more stable investments that <br />have minimal risk. The OPEB trust which is more aggressive is the only investment <br />that has decreased in value. <br />Mr. Hernandez also inquired about any potential to increase efficiencies such as <br />digitizing paystub distribution and road maintenance cost examination. Mr. Kay stated <br />that roads will continue to be maintained at the same level for now to max out SB1 <br />funding and avoid higher costs in the long-term. Mr. Kay stated that evidence has <br />shown that while deferment of road maintenance yields short-term savings, it ends up <br />being more costly in the long-term. Mayor Cutter concurred that the City should <br />continue road maintenance on a contract basis and in-house especially after investing <br />in equipment. <br />Mayor Cutter requested clarification about funding for projects. Ms. Warmerdam <br />Page 3City of San Leandro <br />63