Laserfiche WebLink
MEMORANDUM <br />Date: <br />June 3, 2008 <br />To: <br />Honorable Mayor and City Council <br />From: <br />Nelson Fialho, City Manager <br />Subject: <br />2008-09 Mid-Term Update – Operating Budget & Capital Improvement Program <br />This document provides updated budget estimates for the 2008-09 budget year which is the <br />second year of the 2007-08 & 2008-09 two-year budget originally adopted by City Council in <br />June 2007. Updated estimates are based on staff’s assessment of current financial conditions <br />now that we are about to enter the second year of the two-year budget. The major <br />adjustments recommended stem from a decline in three General Fund operating revenues <br />from the original budget estimates. It is recommended that original budget revenue projections <br />be reduced by $4.4 million primarily due to performance of property tax, sales tax, and <br />development service fees. <br />Operating Budget <br />While the original budget projected a modest growth in property tax revenues, the housing <br />downturn and sub-prime mortgage crisis has played a greater role than initially expected. <br />Although Pleasanton has fared better than most cities that have experienced high rates of <br />delinquencies and foreclosures, we share in the pain to the extent the overall county <br />collections are affected. The original budget also projected growth in sales tax in line with the <br />growth of inflation which now looks to be too optimistic given our current economy and a <br />relatively static level of commercial and retail development. And, as is true in the case of most <br />economic downturns, building and construction related revenues have fallen to levels not seen <br />in the last decade. Fortunately, we have put into place City Council adopted financial policies <br />that serve to guide budgetary planning and reserves that are sufficient and can be called upon <br />to guarantee a balanced budget. However, reserves alone have not been relied upon to keep <br />our General Fund in balance. As a precautionary measure, not knowing what the future may <br />hold, the operating departments have made reductions of almost $1 million. Further measures <br />of this type may be necessary in the future to assure an alignment of revenues and <br />expenditures. <br />ï <br /> <br />