Item 17 - Laserfiche WebLink

Page 3 of 6 Why does the City need more funding? The General Fund supports both City services and infrastructure. As the community has grown over the years, City services and programs have expanded to accommodate the increase in service demand. The City’s operating costs are also rising due to inflation/increase in the Consumer Price Index (CPI). Overall, the City lost more than $11 million in revenue during the pandemic and has not fully recovered to the pre-pandemic level, impacting the City's financial stability. Rising personnel, contract service, and material and supply costs coupled with reduced hotel tax revenue puts pressure on the General Fund budget. Beyond the current budget cycle, deficits are projected if budget solutions are not implemented. Annual budget deficits are projected to range from $2 million to greater than $7 million. The deficits may be higher if there are economic downturns over the next several years. It will be challenging to keep pace with the service needs expected by the community in future years, and additional resources will be required to sustain services. In addition, many City facilities, infrastructure, and parks were constructed and renovated during a significant growth period in the 1980s and 1990s. These community-owned assets such as fire stations and park systems are aging and funds are needed to repair and replace them. Anticipating significant future repair and replacement costs, the City Council directed staff to develop a 10-Year Infrastructure and Facilities Replacement Plan as part of the 2017- 19 budget adoption in June 2017. The goal was to identify estimated costs and a funding plan. Staff started developing the plan and the work was put on hold due to the COVID-19 pandemic; post-pandemic, staff revisited and updated the plan. The draft plan serves as a guide for a more comprehensive asset management plan and was presented to the City Council in March 2023. The estimated annual repair and replacement costs over the next 10 years for the General Fund and Enterprise Funds total close to $900 million, or approximately $89 million in annual costs. In June 2023, the City Council approved funding for the development of an Asset Management Plan that will aid the City in identifying costs for maintaining the infrastructure to meet the desired level of service. In addition, various City master plans and assessment reports (facilities, storm drain, parks, sidewalk, etc.) will be developed/updated and incorporated into the comprehensive asset management plan. While the asset management plan is in development, the City needs money to fund both near- and long-term repair and replacement projects, as City facilities and infrastructure will deteriorate over time if not repaired or replaced. DISCUSSION What are the polling results? Based on the City Council’s direction, staff and the City’s consultants developed a ballot measure feasibility survey taking into consideration the feedback from the City Council and community and the City’s funding needs. After performing a comprehensive analysis of all the potential revenue options that were presented to the City Council on August 15, 2023, it was concluded that sales tax increase, General Obligation bond, and hotel tax measures are potentially viable. A broader list of revenue options is provided as Attachment 1. Sales tax is paid by both residents and non-residents (businesses and visitors), ad valorem tax associated with a General Obligation bond is assessed on both residential and commercial property owners, and hotel tax is paid by visitors. For the survey, both sales tax and hotel tax are considered a general purpose tax that requires majority voter approval. Funds can be used Page 219 of 371