CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 13 of 14 Council approved the deletion/deferral of over $8 million in capital projects for reallocation to other projects as part of the 2023-2025 two-year budget development; some of the projects included HVAC replacement for City facilities, sound walls, parking lot resurfacing, and street improvements. The Draft 10-Year Infrastructure Plan was presented to the City Council. It shows a $900 million funding gap over ten years for the General Fund and Enterprise Funds to maintain community assets in a “state of good repair.” The City Council directed staff to include funding in the 2023-25 budget to develop an Asset Management Plan to identify the funding gap and develop a plan to fund deferred maintenance. • Summer/Fall 2023: The City Council affirmed the direction to explore new revenue options and reduce expenditures to eliminate the General Fund budget deficit in public meetings. • September 2023: A public opinion poll was conducted to assess the viability of a sales tax measure, hotel tax measure, and general obligation; the results showed a half-cent sales tax measure is potentially viable. • December 2023: The polling results were presented to the City Council at a public meeting, following which the City Council directed staff to launch a comprehensive outreach plan to engage, inform, gather, and listen to input from residents and stakeholders on City needs and the proposed plan to meet those needs. • January-July 2024: The City launched a comprehensive community outreach plan to bring awareness of the City’s structural budget deficit, gather questions and provide feedback to the City Council, and to assess the viability of a half-cent sales tax measure. That public outreach, which included many touchpoints with the residential and commercial communities, is summarized below. • February 2024, the City opened a community survey asking residents to offer feedback on how they would rank City priorities. The City received more than 3,100 responses to the community survey. • March 2024: Staff provided an overview of the General Fund structural deficit and forecast assumptions used for the long-term financial forecast; the City’s sales tax consultant provided an overview of sales tax; the City Council approved defunding $18.9 million in General Fund supported projects to fund critical storm drain projects, including defunding the Skate Park and Century House projects. • May 2024: The City Council approved $2.5 million in cost reductions from the FY 2024/25 budget; the contingency menu of potential service reductions was presented to the City Council regarding potential service cuts if new revenue sources are not identified. The contingency menu is attached to this staff report. • June 2024: The community engagement results were presented to the City Council; a second public opinion poll showed that a half-cent sales tax measure is viable and has support from the community. • July 2024: The City Council approved placing a half-cent sales tax measure on the November 2024 ballot. Summary of Community Outreach Efforts in Spring/Summer 2024 During the first half of 2024, City executive team members met with over 25 community groups, connecting with several hundred residents and non-profit and business representatives to share a presentation on the City’s financial situation. Among the groups that received the presentation were service clubs, cultural boards and groups, business Page 45 of 114