TO: Honorable Mayor and Members of the City Council
FROM: Tom Kisela, City Manager
1. Subject
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Fiscal Year 2024-2025 General Fund Budget Balancing Proposal.
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2. Summary
The Fiscal Year 2024-2025 General Fund budget balancing proposal is being presented for consideration by the City Council as directed by the City Council’s Budget Ad-Hoc Committee.
3. Recommended Action
recommendation
1. Provide direction on the temporary budget reduction(s) to be included in the Fiscal Year 2024-2025 budget adoption.
2. Provide direction to return in December 2024 to restore and/or implement additional reductions.
3. Provide direction to proceed with a Request For Proposal for a fee and cost allocation study.
4. Provide direction to proceed with exploring the possibility of implementing long-term rental fees, life and safety fees for students at colleges and universities, penalties for over enrollment at colleges and universities, annual impact fees for all residential investment properties, and a three and four stars hotel incentive program and/or sales tax rebate.
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4. Fiscal Impact
Various revenue enhancements and budget reductions to the Fiscal Year 2024-2025 General Fund budget.
5. Strategic Plan Goals
Goal 2: Be a fiscally healthy community.
a: Expend fiscal resources responsibly
6. Discussion and Background
At the May 14th City Council meeting, the City Council directed staff to continue discussions with the Budget Ad-Hoc Committee (Committee) to address the budget deficit for the Fiscal Year 2024-2025 (FY25) and prepare a comprehensive fiscal policy. Staff is currently working on the comprehensive fiscal policy and will return to the City Council this summer for further discussion.
After further review and discussion, the Committee recommended a temporary reduction, effective July 1, 2024, to the citywide General Fund expenditures of approximately $4.6 million and an additional $8.2 million of future reductions in December, if needed. The Committee also recommended $9.4 million of potential new revenues of which $5.7 million is one-time revenue. There are five new revenue enhancements that require additional research from staff. Additional information from these sources will return to the City Council at a future date for discussion and consideration. The remaining deficit of $3.2 million is proposed to be covered by the Catastrophic Reserve. Staff is seeking direction from the City Council on how to proceed to finalize the City’s FY25 budget.
7. ATTACHMENTS
• A - FY25 Proposed Revenue Enhancements
• B - FY25 Proposed Expenditure Reductions