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Temporary Recession Reserve may need to be drawn upon. She asked if staffhad any anticipation as to an amount, or if it depended upon what happens with the State? Ms. Rossi pointed out that staff showed the high-side number over two years as $3 million dollars. In the current year it was a little over $1 million dollars. She did not expect this to be anywhere near that number. Ms. McKeehan pointed out that the overall goal has always been, and will continue to be, to make sure that City expenses match revenue at any point in time. Ms. Rossi pointed out that there was an increase in sales tax this quarter, and mentioned that if there was a strong increase by Christmas, this situation may be avoided. Mayor Pico noted that the City is starting out with a $4 million dollar Temporary Recession Reserve with $1.1 million dollars added this fiscal year. He pointed out that if nothing were added in the second year, $5.1 million dollars would be available in the Temporary Recession Reserve, with a worst-case scenario of using $3.1 million dollars, leaving a balance of $2 million dollars. At that particular time, Ms. McKeehan pointed out that Council would be looking at establishing another budget with another set of facts. Mayor Pico believed it appeared expenses were under budget for the year of $4.9 million dollars. Money in the amount of $2.9 million dollars was not spent before the end of the year, and is being carried over to the carrent year. This would effectively take the $4.9 million dollars of cest savings realized and reduce it to $2 million dollars. On top of that, there is an $800,000 increase in revenues over pmjectious, which includes the $1.4 million of one-time revenues. As he looked back over the last 11 years, he noted that the City has almost always had a one-time adjustment, and in most cases, the adjustment has been positive. When looking at the budget surplus for the year, the City realized roughly $2.8 million dollars in teams of General Fund surplus. Previously $1.3 million was allocated to Temporary Recession Reserves. If this reserve had not been created, an additional $1.3 million dollars of surplus would have been realized. He noted that potentially, the City ceuld have ended up with a $4.1 million dollar surplus but instead decided to take $4 million dollars and store it away in a Temporary Recession Reserve account in the last fiscal year for the uncertain future. On top of that, $10 million dollars was ~'ansferred from the General Fund into Capital Projects, which would have helped fund operations in terms of a serious financial situation. In actuality, he believed this could be looked at in terms of receiving $14.1 million dollars of revenue in excess of expenses. In addition, he pointed out that the Internal Service Reserve Projects were ereated and reserves of $48.5 million dollars that were stored away over the past 11 years are available for expenses in times of financial restraint, such as retiree medical, workers compensation, vehicle replacements, or facilities renovations. Ms. Ayala pointed out that $16 million dollars of the $48.5 million dollars is the Retirees Medical Reserve Fund. She strongly hoped this reserve fund would not be Pleasant City Council 11 10/21/03 Minutes