06-20-12 Item A: Sustainable Budget Discussion

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services in the community. The subcommittee presented its report to the council in April 2012. That report is included as Attachment B. In the FY13 Proposed Budget, the General Fund forecast was updated to show a $7 million budget gap (Attachment C). The City Manager set out a path to achieve a stable budget over a two-year period, starting with over $4 million in cost reductions and service changes in the upcoming fiscal year. The two-year plan also called for nearly $3 million more in further service impacts and cost reductions in FY14. In addition to addressing the funding shortfall for the current service mix, the council has also had discussions about several service areas where the current level is inadequate and should be increased in order to provide for good stewardship of public assets, to meet council goals and to address community desires for service level changes. Some examples are street maintenance, parks and recreation operations and maintenance and ambulance transport services. The Multi-Year Financial Plan, which was last updated in April 2011, provides information about various unfunded needs. The plan is included as Attachment C. There are many potential needs for new revenue sources and limited opportunities to ask voters to approve new funding. In addition, the City is not alone in facing budget deficits and the potential need to ask voters to support new taxes or fees. In the past, the council has engaged in discussions on the sequencing of financial measures that would be put forth to voters. As any discussions about potential new revenue sources advance over the next several months, it will be important to be strategic in developing an approach to citizens to ask for new funding, by also considering plans that Lane County or the school districts may have to request new funding. FY14 Budget : The City Manager created a different approach to developing the FY13 budget. The new approach presented budget strategies to the Budget Committee much earlier than in previous years so that the committee could provide input to the City Manager for the FY13 Proposed Budget. The trade- off for that early review and input was that the proposed budget document was significantly shorter than in past years. A different strategy may again be appropriate for development of the FY14 budget and the City Manager will present his approach at this council work session. RELATED CITY POLICIES Fair, Stable and Adequate Financial Resources A government whose ongoing financial resources are based on a fair and equitable system of revenues and are adequate to maintain and deliver municipal services. • A long-term sustainable budget • New or expanded revenue sources • Accessible and transparent financial information COUNCIL OPTIONS No action is requested, so no options are presented. CITY MANAGER’S RECOMMENDATION No action is requested, so no recommendation is presented. S:\CMO\2012 Council Agendas\M120620\S120620A.doc