01/21/1986 Meeting - Laserfiche WebLink

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e e e Mr. Wong sai d the Operati ng Budget i ncl uded two estimates for expenditures., One estimate was for a three percent increase in expenses and the other assum- ed a five percent increase in expenses. He said the City is planning a thr'ee percent increase. If the increase is three percent, the City will have $500,000 with which to reinstate services or capital projects in FY86-FY87. If the increase is five percent, the City will have a deficit in FY86-FY87. He noted that the City has cut more than $1 million worth of services from this year's budget. Emphasizing the difference in a three percent increase and a five percent increase in expenditures, Mr. Gleason said the City cannot control such things as binding arbitration settlements. Mr. Long said past experience indicate's that costs increase about four percent a year. Answering questions from Mayor Obie, Mr. Wong said the budget included all approved revenues except funds from the State gas tax, which will be in the' Capital Budget. The State cigarette tax and the increase in the Group W franchise were included in the expected revenues in the operating budget. Mr. Wong reviewed the estimated replacement value of the City's assets, which total about $1.3 billion. He said $7 to $14 million is needed annually to maintain the assets. Answering a question, he said the replacement costs were based on 1984 replacement values. He reviewed the City's expenditures for capital projects from 1980. He said about half of the 1986 general capital projects have been frozen because of cuts in Federal funds. Mr. Wong said the Capital Improvement Program (CIP), which will be presented to the council. will indicate that the minimum amount needed to maintain the investment in general capital projects and protect citizens' health and safety in FY86-FY87 is $1.58 million. Answering questions, Mr. Wong said no projects in the Riverfront Research Park are included in the FY86-FY87 CIP. It will include only about $450,000 for street overlays, although $1 million to $1.5 million is needed annually for street overlays. About $4 million is needed now to catch up on the street overlays that have been postponed in the past. The amount budgeted for the FY86-FY87 CIP is not enough to maintain the City's infrastructure. Discussing the Six-Year Forecast, Mr. Wong said there will be a gap between revenues and expenditures. Answering questions. he said the gap may decrease in 1992 because the tax collection rate may increase and property taxes will have increased the six percent annually permitted by State law. F. Six-Year Financial Strategy Mr. Wong presented a Six-Year Financial Strategy which, he said, is intended to fund the operating budget and a minimum CIP ($1.58 million in FY86-FY87). Mr. Wong said no in the strategy. nues. Some will $600,000. new major revenue sources, such as a sales tax, are included New revenue sources will produce comparatively small reve- produce only about $5,000; some will produce as much as MINUTES--Eugene City Council January 21, 1986 Page 3