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Mr. Sullivan questioned the VLF in lieu of property taxes and referred back to the <br />graph on page 10 of the report. <br /> <br /> Ms. Rossi explained that the combined lines on the graph represented the sum of <br />both the VLF and property tax compared to what the City has previously received which <br />was just the VLF. <br /> <br /> Mr. Sullivan confirmed that this was property tax money being used. <br /> <br /> Ms. Rossi stated that this would grow in relationship to property taxes to the <br />extent the City's properly taxes will be a much more reliable source as growth rate is <br />higher than VLF which, could be good for the City. <br /> <br /> Mr. Sullivan asked if this was new property tax money and not existing property <br />tax money. <br /> <br /> Ms. Rossi said yes. <br /> <br /> Mr. Sullivan stated that there has been a significant amount of attention paid to <br />personnel costs, increase in staff salary, PERS, and medical benefits. He would like to <br />know in terms of the percentage of the City's total budget or revenue, how big of a piece <br />that is and how big of a problem it will be going into the future as it relates to the <br />increase in these costs compared to the forecasted revenue and other long-term <br />expenditures. He would also like to know what strategies have been discussed and <br />how comfortable staff felt these strategies are adequate in managing the escalating <br />costs. <br /> <br /> Ms. Rossi replied that she did not have the information. She believed the total <br />percent of the Operating Budget was in the range of 50-55%. She said looking at the <br />five-year projection outward, it would be dependent upon whether the revenue <br />increased by 5% and it whether all of the City's costs were constrained by the revenues. <br />Personnel costs cannot grow larger than revenues. <br /> <br /> Mr. Fialho indicated that as a part of Council's priorities for the coming year, this <br />would be a project that would involve developing a long-term fiscal strategy both for the <br />short and long-term. The idea is to address some of those concems, specifically from <br />cost containment initiatives to things the City can do differently on the labor side. He <br />said short-term for the operating budget for the next two-year cycle, it is a balanced <br />budget with some conservative revenue estimates. He reiterated that for the short-term, <br />the City is all right, long-term however; he believed the City needed to do some things <br />differently. <br /> <br /> Mr. Sullivan asked if Council would have the opportunity to fully explore these <br />and come up with strategies and options. <br /> <br /> Mr. Fialho said yes. <br /> <br />City Council Workshop <br /> 7 06108/05 <br /> <br /> <br />