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- ---- - -- --.- e Mr. Boles noted for the record that the amendment was a one-time adjustment to the UGB to correct an error and was not a precedent for future action. Ms. Czerniak said that as a result of the council's action, the UGB would be moved 140 feet east from its present location to include the existing house. II. WORK SESSION: FY94-FY99 FINANCIAL FORECAST Tony Mounts, Financial Management Services Division, provided the staff presentation. He used a series of graphs to show the council a best case scenario in which the economy remained stable and State replacement revenue becomes available for school funding; a worst case scenario in which a recession occurs and no replacement revenue is available for schools; and the best case scenario overlaid with the Eugene Decisions strategies. Mr. Mounts reviewed the revenue and requirement assumptions underlying the three scenarios. Mr. MacDonald suggested that staff and council use the phrase proffered by Budget Committee member Tim Laue, "Eugene Transitions," when discussing the implementation phase of Eugene Decisions. Mr. Nicholson questioned why the scenarios did not include the possibility of unexpected revenues resulting from, for example, Clinton Administration decisions. Mr. Robinette suggested that the council had little experience e with such unexpected revenues. Mr. Mounts said that Warren Wong, Administra- tive Services Director, would discuss some of the potential "upsides" of the FY94 budget. Mr. Gleason noted that the council adopts the variables in the forecasting model employed in the process. He added that, while staff has attempted to incorporate all the possible revenues available, there has been little "upside" to the forecast in the past ten years. The City's work load continues to increase, which affects the results of the forecast. Mr. Mounts noted that generally, the forecast is not based on any elaborate financial modeling due to the dependence of local government on property taxes. The principal elements in the forecast are the inflation rate, existing revenues from outside agencies, and the service mix carried forward. The forecast indicates trends based upon those factors, and is not a precise projection. Mr. Mounts said for that reason, the forecast for earlier years in the forecast period are more accurate than for later years. Mr. Mounts reviewed the worst case/best case financial forecast completed prior to the Eugene Decisions process. Mr. Mounts compared the FY92 best case assumption with the FY93 best case assumption. He noted the significant difference in the inflation rate and slight difference in property tax collection rate, and pointed out that the combined rates drove the projection up to a small degree in out years. Responding to a question from Mr. MacDonald, Mr. Mounts said that the projec- e MINUTES--City Council Work Session December 8, 1992 Page 2 4 p.m.