►
Description
San Bruno City Council Meeting April 27, 2010 10d. Policy for Maintenance & Use of General Fund
A
B
C
So
I
want
to
talk
about
the
development
of
the
reserve
policy
back
in
February
at
a
study
session
and
then
at
his
regular
City
Council
meeting
staff
discuss
with
the
city
council
revenue
shortfalls
for
the
for
the
current
year
and
strategies
for
just
addressing
that.
As
part
of
the
conversation,
the
City
Council
requested
that
the
staff
developed
and
recommended
policy
and
the
use
of
both
the
general
fund
reserves
and
also
the
equipment
replacement
reserves.
C
The
general
fund
reserves
really
serves
a
couple
of
purposes.
They
really
fulfilled
primarily
a
working
capital
need,
that
is
to
say,
there's
some
cyclical
elements
in
terms
of
our
revenue
streams
and
having
a
reserve
that
provides
working
capital
o
really
allows
us
to
cover
the
cash
flow
needs.
So,
for
instance,
we
talked
a
little
bit
about
property
taxes.
C
We
get
to
primarily
to
payments
of
property
taxes
that
being
in
December
and
April,
and
so
those
revenues
obviously
are
a
very
substantial
piece
of
the
revenue
stream
for
the
city
and
whereas
the
expenditures
for
most
part,
such
as
salaries,
are
a
fixed
costs
that
are
recurring.
So
the
reserve
fund
provides
for
the
working
capital
need
for
that.
C
C
Other
consideration
is,
you
know
what
is
the
appropriate
level
of
these
reserve
balances
and
in
looking
at
the
various
elements
there?
As
I
indicated,
one
of
them
is
cash
flow.
The
other
one
is
expenditures,
and
you
know
what
what
part
of
our
expenditures
have
some
degree
of
flexibility
versus
not
and
I
would
submit
that.
C
In
most
cases,
cities
have
pretty
fixed
expenditures,
that
is
to
say
that
most
of
our
costs
are
labor
costs
and
therefore
but
salaries
and
wages
that
we
pay
are
really
an
ongoing
recurring
type
of
expenditures
that
we
incur
the
other
element
that
we
need
to
consider
being
in
the
bay
area.
Obviously,
our
potential
for
disasters
there
and
obviously
the
one
that
comes
closest
to
mine,
is
potential
of
a
severe
earthquake.
And,
lastly,
we
touch
down
the
earlier
in
terms
of
the
state
take
away
for
redevelopment
agency
funds.
C
D
C
Yes,
the
the
general
fund
reserve
currently
has
a
balance
about
5.5
85
million
dollars.
Mathematically.
If
we
take
the
general
fund
expenditures,
do
the
calculation
it
works
out
to
be
about
five
point:
two:
four
six
million.
So
we're
a
little
bit
above
that
minimum
that
we're
recommending
about
300,000
and
change
above
that
level
for
the
general
fund
reserve.
C
C
Replacements
of
our
capital
assets
that
being
our
equipment
and
monies
have
been
added
to
the
fund
really
as
part
of
the
general
fund
budgeting
process.
Every
year
we
charge
specific
departments
based
on
the
assets
they
own
into
this
equipment
reserve
what
they
help
with
the
goal
of
having
those
funds
available
as
the
these
assets
hit
there
in
the
life
cycle
or
potentially,
if
there's
obsolescence,
there's
money's,
there's
they're
available
to
replace
these
funds
and
over
the
course
of
you,
know
these
years,
in
which
we've
accumulated
these
money.
C
We're
projecting
that
by
the
end
of
this
fiscal
year,
we're
going
to
have
five
point:
four
million
dollars
as
a
balance
in
the
equipment
replay
replacement
reserve
fund
in
looking
at
what
is
an
appropriate
level
for
this
particular
reserve
fund.
We
looked
at
what
the
value
of
our
assets
are.
What
is
the
cost
of
all
these
equipments
that
we
own
at
the
city
and
look
then
doing
that
analysis?
C
We
identified
that
there's
a
8.2
million
dollars
of
value
sitting
in
our
books,
if
I'm
a
sitting
in
the
city,
and
we
think
that,
given
where
the
reserve
level
is
and
the
value
of
these
assets,
the
funding
level
is
about
sixty-five
percent.
You
know
mathematically
calculating
that
it
works
out
to
be
sixty-five
percent.
So
we
think
that
a
fifty
percent
level
would
be
sufficient
to
meet
our
needs.
C
What
that
fifty
percent
level
obviously
is
telling
us
is
that
practically
every
two
years
you
know
we
have,
we
were
able
to
replace
these
assets,
I
mean
you
know
if
we
have
assets
of
a
million
dollars,
and
we
have
you
know
for
our
hypothetical
example,
and
we
have
five
hundred
thousand
dollars.
Obviously
we
can
replace,
on
average
about
half
of
those
assets
on
any
given
year.
C
So
with
that
thought
in
mind,
staff
is
recommending
that
we
set
a
level
for
the
equipment
replacement
reserve
to
this
fifty
percent
level,
and
we
believe
that
that
has
that
this
is,
you
know
sufficient
to
meet
the
needs.
The
ongoing
needs
of
the
city
in
terms
of
replacing
its
assets
and
so
be
able
to
have
the
funding
necessary
as
working
capital
and
as
a
reserve
to
meet
those
requirements.
C
So
with
that
said,
with
city
council's
consideration.
If
this
is
that
this
recommendation
is
something
that
city
council
feels
comfortable
with,
then
we
would
incorporate
this
as
part
of
the
budget
document
that
would
be
presented
to
you
in
June,
and
so
that
this
policy
becomes
really
a
component
of
that
budget.
Adoption
process.
B
B
Not
recommend
that
your
policy
allow
only
for
the
maintenance
of
a
minimum
balance,
particularly
in
the
general
fund
reserve,
as
a
finance
director
has
outlined
in,
and
maybe
did
not
absolutely
emphasize,
is
that
the
policy
parameter
would
be
for
the
maintenance
of
a
minimum
balance
at
sixteen
and
two-thirds
percent
of
general
fund
operating
expenditures.
The
amount
that
you
identify
as
a
cushion
$300,000
or
so
is
a
very
minimal
amount
above
the
minimum
and
I
would
certainly
not
recommend
that
the
City
Council
consider
simply
utilizing
that
money
just
because
it
exists.
B
You
would
certainly
strive
to
have
a
reserve
balance
that
would
exceed
the
minimum
at
all
times
and
one
which
would
provide
the
necessary
level
of
comfort
for
the
City
Council,
based
as
some
of
the
materials
attached
to
the
staff
report.
Identify
it
really.
Your
assessment
of
what
amount
constitutes
the
necessary
level
of
reserves
at
any
given
time
is
really
as
much
a
level
of
comfort
and
understanding
of
your
own
risk,
tolerance
and
preference
and
priority
for
this
individual
city.
B
Conversely,
if
the
City
Council
felt
that
it
was
prudent
and
that
expenditures
were
necessary
in
that
amount
above
the
floor,
if
you
will
you
have
that
little
bit
of
cushion
or
opportunity
to
address
one-time
expenditures,
other
operating
contingencies,
and
you
do
have
a
little
bit
of
flexibility.
I
hope
that
answers
the
question.
Oh
yeah.
A
I
wasn't
going
to
get
into
any
discussion
how
to
spend
excess
money,
but
there's
other
entities
around
it
very
well.
Might
you
know
so
I
just
want
it
brought
up
because
I,
you
know
think
as
a
minimum
16-point,
something
percent
as
a
minimum
is,
is
a
minimum.
This
risk-taking,
stuff
I
get
very
conservative
with
playing
around
with
that
in
our
environment
now
and
it's
it's
too
dangerous
to
to
keep
small
amounts
of
funds
there,
just
as
a
as
a
balance
and
keep
your
fingers
crossed
at
much
where
they
have
a
cushion.
B
If
I
might
I
would
make
some
additional
comments
regarding
the
equipment
reserve
and
as
the
finance
director
has
indicated,
there
is
a
recommendation
for
your
consideration
that
would
set
the
minimum
balance
in
the
equipment
reserve
and
amount,
which
is
substantially
less
than
the
amount
that
is
currently
identified
as
a
balance
in
the
fund.
As
the
city
council
is
aware,
there
is
approximately
3
million
dollars
of
a
receivable
that
is
comprising
a
portion
of
that
existing
fund
balance.
B
The
comments
regarding
the
general
fund,
notwithstanding
I
would
say
that
the
annual
deposits
into
the
equipment
reserve,
the
expenditure
history
and
the
asset
value
being
protected
by
the
equipment
reserved
for
the
equipment
replacement
fund.
It
does
indicate
that
it
may
be
an
opportunity
to
consider
adjustment
of
the
transfers
in
on
an
annual
or
a
continuing
basis,
or
and
or
as
we've
discussed
in
as
you're
going
to
hear
in
just
a
moment.
Strategic
use
of
that
note,
receivable
to
offset
general
fund
operating
budget
or
other
considerations.
So
again,
those
are
opportunities.
B
D
E
E
Vice
mayor,
my
first
question
is
going
to
be:
do
you
believe
if
this
recommendation
were
to
go
forward
on
the
equipment?
Reserved
specifically,
would
staff
have
a
thought
or
view
of
utilizing
some
of
that
to
the
shortfall
and
the
2
10
to
11
budget,
or
is
that
a
thought?
That's
come
across
someone's
mind
yeah.
B
I'm
going
to
go
ahead
and
answer
that
question
because,
in
view
of
the
finance
directors,
limited
exposure
to
our
previous
conversations
in
two
are
having
jumped
in
at
the
middle
middle
of
the
stream
with
our
budget
preparation
process.
The
answer
to
that
question
is
yes.
The
staff
has
previously
discussed
with
City
Council
that
note
receivable
from
the
Redevelopment
Agency
and
the
potential
of
utilizing
some
amount
of
resources
as
a
on
a
repayment
basis
from
the
redevelopment
agency
as
one
of
several
strategies
to
address
the
current
year
and
next
year's
general
fund
operating
budget
shortfall.
E
You
know
going
to
the
general
reserve
and
we
want
to
staff,
wants
to
recommend
a
5.2
for
6
or
16
three-fourths.
You
know
the
director
talked
about
concern
of
an
earthquake.
I
want
to
talk
about
a
concern
of
a
mudslide
like
what
I
went
down
the
hill
with
the
public
works
director
at
Madison
doesn't
take
much
for
that
to
be
gone
to
me,
this
is
the
emergency.
E
This
is
what
we
have
in
the
savings
account
to
address
disasters
or,
as
staff
will
call
it
the
one
time,
since
we
were
short
in
this
last
budget
cycle,
I'm
going
to
say
it
again.
One
time
here,
one
time
there
to
me
becomes
one
time
at
everywhere.
Okay,
so
I,
don't
know
that
that's
enough.
I
would
really
be
interested
to
see
the
other
cities
within
our
County
that
have
a
policy
I'd
like
to
see
what
their
percentage.
E
What
they're
set
at
I
would
like
to
see
exactly
what's
in
their
reserve
account
and
let's
have
a
comparison.
Let's
go
apples
to
apples
here,
I
like
those
type
of
reports,
rather
than
this
third-party
recommendation.
I
want
to
see
it
firsthand
from
our
neighboring
communities
and
within
this
county.
What
they're
doing
maybe
we'll
find?
This
is
a
great
process,
and
this
is
what
everybody
has
adopted.
E
E
B
Each
year,
the
asset,
the
required
contribution
is
calculated
based
on
the
useful
life
and
the
value
of
the
assets
reserved
I
believe
that
there
was
one
year
in
which,
as
a
budget
strategy,
we
reduced
the
transfer
in
in
consideration
of
the
overall
health
of
the
reserve
fund
and
the
or
the
equipment
replacement
fund,
and
they
limited
or
at
that
point,
no
need
to
further
increase.
The
fund.
However,
it
is,
it
is
continuing
practice
of
the
city
to
charge
each
of
the
departments.
B
E
I
know
we've
also
tried
to
strip
the
string
stretch,
the
length
of
a
vehicle
trying
to
make
sure
we
can
get
the
extra
gear
out
of
it.
The
extra
10,000
20,000
miles,
or
what
have
you
I
just
so
I
understand,
there's
all
accounting
to
everything,
but
you
know
when
you
accrue
less
at
one
time
or
another,
when
we
we
do
the
length
of
the
equipment,
and
we
see
that
out.
I
just
get
concerned
that
you
know.
Eventually
things
come
up
to
get
you
in
the
end.
E
You
know
you
only
can
put
something
off
so
long
and
all
of
a
sudden
we
don't
just
need
one.
We
need
several
because
we
have
waited,
and
we've
tried
to
do.
A
due
diligence,
I
can
tell
you.
Reserves
is
a
subject
for
myself
that
I
have
a
great
deal
of
concern.
I
have
a
concern
that
we
would
be
looking
at
reserves
in
order
to
balance
the
budget
coming
up
and
I.
Don't
think
that's
how
you
start
out
to
balance
your
budget
into
10
to
11
in
my
world.
E
D
Good
future
I
just
want
to
comment
on
that.
I
think
I.
Think
few
of
us
were
on
this
council
when
we
didn't
have
a
reserve
and
I
think
I,
don't
I,
don't
think
we
had
a
major
concern
at
that
point.
I
think
we
had
things
in
place
and
that
and-
and
we
were
more
concerned
about
the
growth
and
improvement
of
the
community
and
master
plans
and
things
and
as
it
came,
you
know
these.
These
reserves
grew,
but
I
believe
that
we
should
have.
D
You
know
in
this
time
and
eight
years
of
budget
cutting
and
things
that
we
we
have
to
know
where
we
stand
in
every
in
every
every
asset,
in
every
account
and
I'm
not
saying
I
would
not
go
forward
and
say:
that's,
you
know
sit
at
the
bare
minimum
at
the
minimum
on
these
accounts
and
then
use
that
money
towards
balancing
a
budget.
But
I
think
it's
it's
something
that
we
should
consider.
I
feel
very
strongly
that
it's
having
to
decide
on
a
percentage
of
the
reserve
versus
and
an
employee.
F
Chair
a
couple
of
a
couple
of
thoughts
that
the
supporting
documentation
that
was
provided
to
a
stage
state
that
two
months
is
minimum,
that
the
recommendation
is
that
that
be
the
absolute
minimum
but
I'm
a
little
uncomfortable
with
the
fact
that
we're
recommending
the
minimum,
but
there's
not
a
lot
of
substance
behind
why
the
minimum
would
be
appropriate
in
our
case
and
what
I
was
hoping
to
see
was
maybe
a
little
bit
more
analysis.
In
terms
of
say,
we
experienced
a
disaster
in
area.
What
would
the
city
would
be
responsible
for?
F
I
know
that
there's
insurance
on
some
properties
that
the
city
owns,
but
you
know
what
would
the
city
be
responsible
for
in
terms
of
prepared?
Would
we
incur
large
expenses
in
repairing
streets,
damage
to
private
property?
I,
don't
know
what
that
exposure
is,
and
you
know
the
two
months,
if
is
better
than
having
no
guidelines
at
all,
but
I
think
I'd
be
a
lot
more
comfortable
if
we
were
to
have
some
real
numbers.
F
That
say
here
is
a
scenario,
and
here
is
what
we
could
be
on
the
hook
for
also
in
terms
of
possible
lawsuits
that
come
up.
I
know
that's
something
else
that
we
would
probably
have
that
without
budgeting
to
that,
so
you
know
at
least
theoretically
what?
What
could
our
exposure
be
in
a
situation
like
that
versus
just
going
with
it
with
the
minimum.
F
Regarding
the
equipment
reserves,
the
the
supporting
information
said
said
that
life
span
of
equipment
is
roughly
five
to
ten
years.
So
looking
at
that
I
mean
if
we
were
to
replace
everything
every
five
years-
twenty
percent
a
year,
I
think
we've
got
to
get
you
into
that
thing.
I,
don't
know,
I,
don't
know.
If
the
fifty
percent
is
high
or
low,
it
almost
seems,
I,
don't
know,
it's
definitely
been
growing.
There
was
enough
there
to
lonesome
out,
so
maybe
that
number
is
high
might
I
guess.
F
First,
a
question
is
what
equipment
is
included
in
that
and
is
there
a
potential
to
add
either
equipment?
That's
not
currently
considered
or
possibly
improvements
to
to
our
equipment
implants
that
that
we
could
include
in
that
reserve
that
isn't
currently
included
and
I.
That
I,
would
you
know,
improvements
to
City
Hall,
maybe
some
upgrades
to
our
parks
that
would
normally
be
budgeted
but
could
possibly
be
accounted
for
and
they're,
not
necessarily
capital
improvement
projects,
but
things
that
might
be
more
maintenance,
but
we
could
take
advantage
of
up
doing
upgrades
in
that.
F
Don't
know
say,
universe,
I
know,
there's
a
lot.
A
lot
of
our
facilities
are
really
old
and
in
generally
I
mean
when
we
talk
about
it,
fixing
a
one
of
our
one
of
our
buildings.
That's
that's
a
capital
project
but
I'm
wondering
if
there
weren't
some
opportunity
to
incrementally
fix
some
things
in
there
that
that
we
could
account
for
as
I,
don't
know
more
maintenance
rather
than
capital
projects.
If
we
were
to
actually
put
money
aside
to
do
those
things.
F
F
We
would
strongly
recommend
not
doing
this,
but
I
don't
know
if
we
would
want
to
do
something
a
little
bit
more
firm,
that
you
know
that
that
it
won't
happen
unless
certain
conditions
are
meant
and
then
the
conditions
that
were
also
outlined
in
the
policy
seemed
a
little
bit
too
general,
maybe
a
little
vague.
So
we
could
maybe
put
a
little
bit
more
language
around
what
conditions
would
have
to
be
met
in
order
for
that
to,
in
order
for
the
reserves
to
be
used,
I
think
that
might
also
be
useful.
A
C
No
that's
at
the
cost
the
purchase
cost.
So,
yes,
your
point
is
well-taken.
The
replacement
cost
may
be
different
than
the
may
be
credited
cost
yes,
so
that
there
for
ya.
The
fifty
percent
is
really
the
cushion
that
were
kind
of
building
building
into
the
reserve
policy
to
provide
for
the
fact
that
there's
going
to
be
some
inflationary
component
of
replacing
these
assets.
Okay,.
B
A
Geographical
nature,
those
kinds
of
things
as
I
was
on
his
council
one.
We
ended
up
spending
millions
on
slides
and
buying
homes
and
relocating
people,
because
we
weren't
covered
and
we
had
to
spend
a
ton
of
money
and
it
just
goes
out
the
door
in
a
second,
so
I
just
think
a
two
month
in
a
reserve
policy
at
a
minimum.
Is
it's
just
not
enough.
E
Yeah
finally,
I'm
just
going
to
say
I'm
one
who
would
wish
and
think
that
we
should
be
more
frugal
and
put
I
would
love
to
see
us
at
the
end
of
a
budget.
Time
say
you
know
what
we
not
only
just
balanced.
We
came
out
in
the
black
because
maybe
we
we
said
the
revenues
were
going
to
be
here,
but
they
became
here
and
that's
a
good
thing.
But
I
don't
want
us
to
rely
on
reserves
as
a
way
to
balance
the
budget.
E
E
B
Me
suggest
that
what
we
heard
and
what
you
would
like
us
to
come
back
with
and
I
guess
what
I
would
reiterate
is
we
weren't
asking
for
any
type
of
action
tonight?
Our
approach
would
be
to
return
to
the
City
Council,
with
a
draft
policy
for
your
final
review
and
approval
in
conjunction
with
the
budget
presentation
process.
So
we
have
some
time
in
between
to
check
back
in
with
you
and
what
I
heard
you
say
that
you'd
like
to
see
as
additional
information.
B
First
is
what
other
cities
in
the
county
and
the
San
Mateo
County
have
reserved
policies
and
if
so,
what
do
those
policies?
What
are
those
policies?
Secondly,
related
to
comparison
with
other
cities
in
the
county,
you're
interested
in
their
reserve
balances,
and
we
have
some
of
that
information.
We
will
certainly
update
that
and
present
that
to
you.
B
You
also
asked
for
some,
I'm
going
to
say
some
examples,
or
some
assessment
of
the
types
of
particularly
disaster
related
risk
that
the
city
might
be
exposed
to.
I
would
suggest
that
we
can
give
you
some
examples:
scenarios,
one
perhaps
from
our
own
experience
of
the
slide
losses
that
turn
out
not
to
be
covered
by
insurance
or
FEMA
as
we
had
anticipated.
So
we
perhaps
we
can
develop
some
generic
types
of
examples.
I
think
the
range
of
those
examples
might
actually
be
unlimited,
but
we
can.
We
can
certainly
bring
you
back
some
information
on
that.
B
So
those
are
the
things
that
I
heard
that
you
wanted
back
as
specific
information.
My
suggestion
is
that
we
bring
that
back
to
you
end
of
May
time
period
in
order
that
you
have
that
information
and
can
engage
in
additional
discussion
prior
to
consideration
of
a
policy
and
will
be
prepared
to
discuss
that
with
you
again.
You.
A
Also
regarding
the
budget
is
coming
up
and
what
we
have
done
in
past
sessions
is
set
some
dates,
so
you
can
have
some
study
sessions
prior
to
voting
on
the
budget.
So
I'd
like
to
suggest
what
we've
done
before
is
three
dates
usually
gets
done
in
two,
and
the
third
is
kind
of
a
backup,
so
I
have
a
suggestion
of
June,
first
second
and
third
or
the
seventh
ninth
and
tenth.
Maybe
you
could
look
on
your
calendars
and
see
if
that
would
work
for
you.
I'm.
D
F
B
B
B
This
part
of
the
presentation
gives
you
an
update
on
the
budget
development
process.
As
the
City
Council
will
recall,
we've
already
discussed
the
preparation
of
the
1011
budget
on
a
couple
of
previous
occasions
with
City
Council,
most
notably
at
year,
fibrillary
10th
in
February
26
meetings.
We
advised
you
of
the
mid-year
financial
status.
We
discussed
with
you
strategies
to
address
the
current
year
budget
and
we
gave
you
projections
for
the
revenue
situation
as
we
then
anticipated
it
going
into
10
11.
B
Status
of
the
current
year's
budget
required
an
adjustment
of
1.3
million
dollars
in
order
that
we
could
reasonably
project
that
we
would
end
the
current
year
with
a
balanced
budget.
As
a
finance
director
reported
to
you
tonight,
based
on
the
third
quarter
results
and
the
amendments
that
the
city
council
has
now
made
to
the
current
year's
budget.
We
do
anticipate
ending
the
current
910
fiscal
year
in
balance,
as
it
relates
to
the
amended
budget
and
based
on
the
previously
adopted
budget
deficit,
elimination
strategies
approved
by
the
City
Council.
B
I'm.
Also
pleased
relatively
pleased
to
report
to
you
tonight
that
our
projections
presented
to
you
in
the
previous
meetings
in
February
remain
on
track
in
terms
of
our
anticipated
revenue
situation
for
fiscal
year,
10
11
I
will
remind
the
City
Council
that
that
was
actually
not
the
case,
as
we
worked
last
year
at
this
time
to
prepare
the
current
year's
budget
and,
in
fact,
having
had
a
very
similar
situation
of
startling
midterm
results
requiring
adjustment
mid-year.
B
Last
year,
we
projected
a
revenue
situation
going
into
fiscal
year,
9
10
that
then
again
needed
to
be
adjusted
downward
in
April
of
2009.
As
we
moved
closer
and
closer
towards
presentation
of
a
preliminary
budget
for
your
consideration
again,
I'm
relatively
pleased
compared
to
a
situation
that
might
have
existed
to
report
to
you
tonight
that
we
have
not
during
the
ensuing
time
period
as
we've
progressed
on
developing
the
budget
for
ten
eleven,
we
have
not
identified
a
similar
situation.
B
In
other
words,
our
projections
remain
as
best
we
can
anticipate
on
track
with
what
we
told
you
in
February.
In
summary,
we
are
anticipating
a
relatively
flat
revenue
situation,
going
into
9,
going
into
10
11
as
compared
to
the
amended
budget
for
nine
ten
and
what
you
see
on
the
slide
in
front
of
you
is
and
we're
calling
the
1011
working
budget.
B
It's
essentially
a
pre
preliminary
budget,
because
I
don't
want
you
to
try
and
pick
this
up
and
compare
it
to
the
budget
that
you'll
get
in
late
May
for
your
consideration
in
June,
because
we're
really
not
yet
done
with
it,
but
based
on
our
progress
to
date,
our
major
revenue
categories
remain
relatively
flat.
There
is
an
anticipated
slight
improvement
over
the
current
year
sales
tax,
although
in
general
terms
that
that
really
nuts
out
against
additional
declines
in
other
revenues,
but
overall,
our
revenue
situation
remains,
as
we
previously
reported
it
to
you
with
no
major
changes.
B
B
B
Most
particularly
as
the
council
is
aware,
we
have
contractual
obligations
related
to
personnel
costs,
in
particular
the
pers
rate,
which
is
going
up
by
a
modest
amount
this
year,
but
also
contractual
obligations
to
merit
related
increases
for
personnel.
As
the
council
is
aware,
no
other
across-the-board
salary
increases
were
provided
this
year
and
our
assumption
remains
the
same
as
we
have
projected
expenditures
for
the
next
year's
budget.
B
We
are
anticipating
continuation
of
all
existing
personnel
expenditure,
containment
and
reduction
strategies
that
were
incorporated
into
the
current
year
budget,
most
particularly
the
continuation
of
a
furlough
currently
at
the
level
of
six
days,
annual
or
representing
a
two
point:
three
percent
reduction
in
salary
or
personnel,
the.
In
addition,
our
budget
is
built
around
an
assumption
of
no
increase
in
the
premium
cost
for
medical
and
we've
showed
you.
The
amounts
of
the
costs
associated.
B
An
additional
item
that
has
been
built
into
the
budget
is
continuation
of
a
scrutiny
to
all
line
items
and,
in
fact,
a
reduction
of
approximately
one
hundred
and
fifty
thousand
dollars
in
line
item
expenditures
as
compared
to
the
current
year
budget,
so
that
exercise
or
that
that
diligence
has
been
exercised
in
producing
the
expenditure
side
of
the
budget
for
fiscal
year.
Ten
eleven.
B
I'm,
sorry
that
I've
got
the
slides
just
a
little
bit
out
of
order,
so
I
beg
your
indulgence
and
are
jumping
around
just
a
little
bit.
In
summary,
the
fiscal
situation
impacting
or
defining
next
year's
budget,
as
it
is
currently
situated,
continues,
as
I
indicated
to
you
before
the
same
basic
parameters
of
the
amount
of
the
deficit
and
I'm,
going
to
repeat
in
some
aspects,
information
that
you've
heard
before
about
the
strategies
that
we
are
anticipating
being
utilized
in
balancing
the
budget.
B
First,
as
you
see,
there
is
an
approximate
two
million
dollar
deficit.
If
you
will,
that
amount
is
comparable
to
the
situation
in
the
current
year,
as
I
mentioned
before,
in
that
there
were
one
time
resources
used
to
balance
the
current
year
budget
straight
from
the
get-go,
and
there
was
an
additional
1.3
million
dollars
of
changes
that
occurred.
Mid-Year.
Those
two
amounts
add
to
a
total
of
two
million
dollars
and
that
two
million
dollar
deficit
number
continues
to
next
year.
We
have
previously
presented
to
you
a
program.
B
So
that
amount
is
again
an
estimate
of
the
amount
that
we
would
expect
to
receive.
But,
as
a
I
would
say,
a
reasonably
conservative
estimate
in
summary,
then,
which
you
see
at
the
bottom
of
the
page,
is
about
370,000
378
thousand
dollars
of
additional
changes,
reductions
to
the
budget
that
need
to
be
incorporated
and,
as
I
have
indicated
to
you
previously.
It
is
my
expectation
that
that
change
needs
to
come
out
of
personnel
expenditures
and
I
will
come
back
to
that
in
just
a
moment.
B
When
we
last
discussed
the
budget
preparation
with
the
City
Council
in
March,
our
specific
agenda
item
was
to
brief.
You
on
preliminary
personnel
reductions
that
would
be
incorporated
in
the
budget,
and
my
primary
purpose
tonight
is
just
to
revisit
those
with
you
and
to
again
refresh
your
memory
regarding
the
anticipated
service
impacts,
which
are
on
the
next
couple
of
slides
and
we'll
review.
Those
very
briefly.
The
total
amount
of
savings
from
the
permanent
elimination
of
a
seven
and
a
half
positions
is
seven
hundred
and
sixty
three
thousand
dollars
again.
B
B
Three
hundred
and
seventy
thousand
dollars
of
shortfall
in
addition
to
that,
the
provided
you
a
summary
of
the
net
effect
of
a
four
hundred
thousand
dollar
Redevelopment
Agency
loan
repayment
and
the
resulting
impact
to
the
city's
equipment
replacement
fund.
As
you
can
see
the
and
as
we've
just
discussed
with
you
in
a
moment
ago,
the
total
note
receivable
in
cash
balance,
leave
a
total
equipment
reserve
fund
balance
of
just
over
five
point:
eight
million
dollars.
B
B
As
I
indicated,
personnel
reductions
are
the
necessary
result
of
our
meeting.
Your
specific
direction
to
deliver
a
balanced
budget
personnel
is
the
city
council
as
well
aware,
represents
approximately
seventy
percent
of
our
general
fund
operating
budget
expenditures
and
I
wanted
to
summarize,
for
you
primarily
in
order
to
gain
any
direction
or
comment
that
the
City
Council
might
have
summarized
for
you,
the
area's
end,
the
impact,
if
you
will
of
the
additional
personnel
reductions
that
will
need
to
be
made
in
fiscal
year.
Ten
eleven.
B
As
his
council
is
aware,
we
currently
employ
167
and
a
half
approximately
168
employees
that
are
funded,
at
least
in
part
through
the
general
fund.
That
includes
our
elected
officials
yourselves,
as
well
as
the
elected
treasurer
and
city
clerk
of
those
positions,
roughly
20
full-time
equivalents,
and
these
are
pieces
of
many
different
positions,
but
full-time
equivalent
of
20
positions
are
funded
by
allocations
from
the
enterprise
funds
for
and
those
positions
are
primarily
in
our
general
administrative
areas
of
the
city.
Our
finance
city
manager,
city
attorney,
HR
operations,.
B
During
our
previous
discussions,
the
city
council's
expressed
an
interest
in
a
priority
for
the
maintenance
of
front-line
Public
Safety
response
and
Prevention
tivities,
taking
only
the
first
line
frontline
responders,
and
this
is
primarily
limited
to
our
sworn
safety
staff
in
both
the
fire
and
the
police
departments.
At
eighty
four
and
a
half
positions
netting
out
those
the
those
that
are
the
what
what
is
funded
by
allocations
from
the
enterprise
funds
and
frontline
sworn
safety
positions.
B
We
end
up
with
63
general
fund
positions
over
which
at
least
the
majority,
if
not
virtually
all
of
the
position
eliminations
will
occur.
As
council
is
aware,
that
includes
the
the
broad
range
of
services
from
parks,
maintenance,
Recreation,
Services,
community
development
services
as
well
as,
of
course,
our
safety
operations.
B
63
positions
now
have
will
be
eliminated,
will
be
reducing
by
seven
and
a
half
positions
and
I'm
anticipating
in
order
to
meet
the
revenue
shortfall
and
in
order
to
balance
the
budget
I'm,
anticipating
an
additional
three
to
four
positions
will
need
to
be
eliminated.
Those
positions
because
I've
exhausted
my
opportunity
to
utilize
vacant
positions
or
a
reorganization.