06-20-12 Item A: Sustainable Budget Discussion

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Sustainable Budget Discussion Meeting Date: June 20, 2012 Agenda Item Number: A Department: Central Services Staff Contact: Jon R. Ruiz www.eugene-or.gov Contact Telephone Number: 541-682-5336 ISSUE STATEMENT This work session will provide the council with an opportunity to review and discuss development of a path to achieve a sustainable budget. This is part of the two-year strategy laid out by the City Manager to balance the budget over the FY13 and FY14 budget cycles. Information about potential new revenues sources and the need for new revenue will be presented and the City Manager will provide a framework for preparing the FY14 Proposed Budget. BACKGROUND New Revenues: Despite making more than $24 million in reductions in the General Fund budget over the past several years, growth in expenditures continues to outpace growth in revenues, resulting in a structural deficit. Each year during the budget process, the City has made adjustments, but the persistent economic recession has continued to affect our ability to fully close the gap. Through all of the recent budget cycles, we have had a goal of achieving first a stable and then a stable budget sustainable budget. A is one where the City can live within its means and fund all current services over the long run with sufficient revenues to cover these costs and maintain adequate reserves sustainable budget for unexpected events. A is one where the City can afford to fund all of the desired items that are not currently part of the service mix with sufficient revenues to cover the enhanced service levels while maintaining adequate reserves. In 2009, the City Manager convened a group of citizens into the Meeting the Challenge Task Force. The MTC Task Force was to recommend new revenue sources that, together with existing revenues, would help balance the General Fund budget. Their report is included as Attachment A. On April 18, 2011, the council held a workshop to discuss long-term financial sustainability. Councilors, members of the Meeting the Challenge Task Force and the City’s executive managers received information about past discussions on revenue sources and discussed various unfunded service needs. The group also discussed various potential new revenue sources and some of the factors to be considered in selecting an approach. During the FY12 budget process, the Budget Committee recognized the difficulty in sustainably funding human services at an adequate level. As a result, the committee recommended that the council form a subcommittee to explore options to secure an increased level of stable and long-term funding for human S:\CMO\2012 Council Agendas\M120620\S120620A.doc