MO 1998-026 to 1998-030 - Laserfiche WebLink

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City Council DISCUSSION Page 2 The 1998-99 Proposed Budget will be balanced on the assumption of continuation of the existing revenue sources. Current estimates for the General Fund revenues for 1998-99 amount to $48,900,000. The City's incremental increase in the business license must be presented for voter approval at the June 2 Municipal Election. The City's total business license revenue amounts to $2.5 million, of which a potential of $690,000 would be lost should voters reject the current business license tax, Measure I. In addition, electrical rate deregulation may have a negative impact on the City's utility tax revenue. This potential is magnified because the utility tax is now the second largest revenue in the General Fund. A reduction in one or both of these revenues would have significant negative impact on the General Fund. General Fund expenditures are anticipated to increase a minimum of 5 % above the 1997-98 level. Development of the City Manager's proposed budget continues at this time and will be balanced with anticipated revenues. The Finance Committee's final recommendation totals $622,200. Three of the expenditure/service adjustments reviewed and approved by the Committee require no immediate General Fund expenditure. These include the following: 1. Funding Requirements for the Doolittle Entryway - Requires development and planning with the City of Oakland and the Port of Oakland which will extend through most of 1998-99. Project funding requirements can be deferred to 1999-00 without any adverse impact on the construction timetable. 2. Increase Contingency Reserve for Major Emergency/Disaster Preparedness - This reserve can be increased in 1998-99 by $250,000 through re -designation of this amount from the Economic Uncertainty reserve. Overall reserve levels can then be increased in future years without an immediate impact on the General Fund. 3. Development Support for the West San Leandro/MacArthur Blvd. Survey Areas - The required allocation of $150,000 should be established as an advance from reserves to the Redevelopment Agency. Scheduled repayment of the advance allows for a transfer from reserves and avoids the need for the use of 1998-99 General Fund revenues. RECAP OF THE BUDGET DEVELOPMENT PROCESS The budget process began for the 1998-99 fiscal year with the State of the City and the Mid -Year Budget presentations on January 26, 1998. Following the presentations, the City Council referred review and development of draft budget strategies to the Finance Committee.