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THE CITY OF -~- CITY COUNCIL AGENDA REPORT j~L~E~S~4NTONo December 18, 2007 Finance Department TITLE: ADOPT A RESOLUTION TO ACCEPT THE FISCAL YEAR 2007-08 FIRST QUARTER FINANCIAL REPORT AND AMEND THE FISCAL YEAR 2007- 08 GENERAL FUND OPERATING BUDGET AND THE 2007-08 LIVERMORE-PLEASANTON FIRE DEPARTMENT SPECIAL REVENUE FUND SUMMARY The first quarter budget review revealed the need for a number of budget adjustments. Current year General Fund revenue estimates need to be reduced $2.2 million due primarily to property taxes and development services fees not performing as anticipated when the budget was adopted. To address this revenue shortfall, an .equal amount of expenditure reductions have been identified. Recommended offsetting expenditure reductions have been made in certain reserves, contingency funds, and department budget reductions. The department budget reductions include one-time capital funding, funding not necessary in the current year, or other items on the margin within departmental budgets that will not affect either staffing or service levels. RECOMMENDATION Accept Fiscal Year 2007-08 First Quarter Financial report and adopt a Resolution amending the Fiscal Year 2007-08 General Fund Operating Budget and the Fiscal Year 2007-08 Livermore-Pleasanton Fire Department Special Revenue Fund Budget. FINANCIAL STATEMENT The recommended action will reduce General Fund revenues by $2.2 million and will reduce General Fund expenditures by an offsetting $2.2 million. This action will also reduce funding going into the various Replacement and Renovation Funds by $1 million which can be absorbed in the short term without affecting planned expenditures. The Replacement Plan has a 20 year funding horizon and departments will be asked to update this plan during the mid-year/mid-term budget process with a critical eye toward priorities and reducing planned expenditures. This action will also increase the Livermore-Pleasanton Fire Department Special Revenue Fund by $1,057,012 to appropriate funding for previously approved MOU salary increases. The Pleasanton only share of the increase is according to the cost share formula is 50.16%, or $530,226.