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 proposed 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. Authorization 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 star 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
This item is continued from the May 28th meeting. Attachment A has been updated to reflect the City Council’s directions. Attachment C, Committees and Commissions was inadvertently left out and is now included for review and discussion.
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) budget 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 several reductions, 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 is proposed to be covered by the Catastrophic Reserve with the understanding that any monies used would be re-paid within two years per the City’s reserve policy. Staff is seeking direction from the City Council on how to proceed to finalize the City’s FY25 budget.
7. ATTACHMENTS
• Attachment 1 FY25 Proposed Revenue Enhancements
• Attachment 2 FY25 Proposed Expenditure Reductions
• Attachment 3 Committees and Commissions