To: Honorable Mayor and Members of City Council
From: Bret Prebula, Finance Director
Prepared By: Bret Prebula, Finance Director
TITLE:
Title
Declaration of Fiscal Emergency
LABEL
RECOMMENDED ACTION:
Recommendation
Adopt a resolution declaring a local fiscal emergency in response to the Coronavirus (COVID-19) pandemic.
Body
DISCUSSION:
The Finance Director recommends that the City Council adopt a resolution declaring a fiscal emergency as a result of the unprecedented impact of COVID-19 and the City's projected loss of revenue from Sales Tax and Transient Occupancy Tax (TOT) in recent months. Continued revenue losses are expected through the end of the current Fiscal Year 2019-20 with a projected shortfall of approximately $10.5 million. Projected revenue losses for Fiscal Year 2020-21 are estimated to range from $15 million to $20 million. As such, the City must address the realized and forecasted revenue losses and revise the City's budgeted revenues for both FY 19-20 and FY 20-21. A loss of $10 million equates to approximately 10% of the City's General Fund budget. Consequently, the City must evaluate ways in which expenses may be drastically reduced as budgeted expenses outpace projected revenues.
To balance the current fiscal year budget, City Staff are actively identifying one-time project costs that may immediately be suspended while utilizing a significant portion of fund balance from the Non-Recurring General Fund; cancelling of capital projects; and reducing various services and supplies. The specific estimated reductions for FY 19-20, which were approved by City Council on April 7, 2020, are as follows:
* Use of majority of remaining reserves available in the Non-Recurring General Fund ($4 million-$5 million)
* Indefinite postponement of the Civic Center Project and reduction of the current project budget back to the General Fund ($3 million)
* A 5% reduction in all City Department budgets ($830K) achieved through reductions in service...
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