11. Mid-year budget adjustment #2ADMINISTRATIVE SEIf2VICES DEPARTMENT
~:•_
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 9 50 1 43255
G U P'E RT1 N 9 <408) 777-3220 • FAX {408) 777-3109
SL7 MM.~RY
Agenda Item No. ~~_ Meeting Date: January 20, 2009
SUBJECT AND ISSUE
Review and approve 2008/09 mid-year budget adjustment #2 which includes a report on
City revenue and expenditures.
BACKGROUND AND FISCAL IMPACT
General Fund
Staff reported on the City's economic condition and the State's situation affecting that
condition in November 3, 2008. General Fund sales tax, planning and permit fees, and
investment earnings forecasts were reduced by $1 million based on current economic
trends_ $915,000 was placed in reserves to address talk of a second State hit on local
revenues and the State had just sold bonds to ea:>e a pending cash crunch.
State officials now warn that the State will run out of cash next month because of their $40
billion budget deficit through the end of fiscal 2009/1 O and the related inability to sell more
bonds in the current market environment_ The cash shortfall, the State budget problem, the
deepening recession, and worsening employment numbers will likely mean that the City's
revenue downturn will continue into fiscal 2009/10 and possibly extend into 2010/11.
Already some grant reimbursements for the Stevens Creek Corridor Park have been frozen
and because of the reduction in car sales, $40,000 in vehicle license fees stopped flowing
into the City in November and December. 7'he $915,000 City reserve and low State
investment pool balance are current contingencies for State issues and staff will present
further actions if warranted. As mentioned to Councii last November, since the lower
revenue picture for 2008/09 persists, staff now proposes the following mid-year 2008/09
expenditure reductions and increases that, in total, offsets this year's $1 million revenue
decline_
General Fund Expenditures (Decrease
Increase
City Attorney interest payoff on outstanding Ioan $(67,000)
Assistant City Attorney - 9 month vacancy (119,835)
Community Development Dir. -Part--time and new hire (19,454)
City Planner - 3 month vacancy (46,600)
Senior Planner - 9 month vacancy (98,550)
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Mid-Year Budget Adjustment #2 and City Revenues and Expenditures
January 20, 2009
Page 2 of 3
Plan Check Engineer - 1.5 month vacancy
Public Works Director - 90% position - 6 months
Public Works Fleet Supervisor - 3 month part-time
Maintenance Worker II - 1 O month vacancy
Equipment Mechanic - 5 month vacancy
Environmental Affairs Coordinator - 3 addf 1 month vacancy
Human Resource Analyst - 3 month vacancy
Senior Office Assistant City Clerk - i month vacancy
Sheriff contract savings
City Hall emergency generator project savings
Simms House rent formerly in below market rate fund
School sports field maintenance to RDA
General Fund reserves
Improve financial system security per audit recommendation
Net General Fund expenditure decrease
(15,300)
(12,420)
(10,000)
(73,348)
(43,393)
(35,100)
(29,800)
(6,600)
(125,000)
(200,000)
{30,000)
(67,600)
(10,000)
10,000*
1.000.000)
* Expenditure needs identified subsequent to fiscal 2008/09 budget adoption.
Redevelopment 1lgency
Because of last year's sale of certain Rosebowl and shopping center parcels to new owners,
the Redevelopment Agency's property tax receipts will increase by $591,000 this year_
After budgeting for the amounts required to be passed-on through to schools, special
districts, and the County and after picking up one-time school field maintenance costs,
$350,000 is placed into Agency reserves which are needed for future development and
housing needs_
Redevelopment AQencv Revenues Increase
Total property tax revenue increase 591.000
Redevelopment Agency Expenditures
Required pass-through to county, schools, and other districts 160,000
State budget action 12,900
School sports field maintenance 67,600
Agency reserves and housing set-aside 350,500
Total RDA expenditure increase 9
RECOl~~~IENDATION
Review and approve 2008/09 mid-year budget adjustment #2 which includes a report on
City revenue and expenditures_
Submitted by_
l --
David woo
Finance Director
A oL~~~r submission:
David W. Knapp
City Manager
~~ -z
Mid-Year Budget Adjustment #2 and City Revenues. and Expenditures
January 20, 2009
Page 3 of 3
Reviewed by_
~ ~~m~P.
Carol A_ Atwood
Director of Administrative Services
11 -3
Ci of Cu ertino
General lend Bud et lte ort
November 30, 2008
Bud et Actual
2007108 2008109 11130/2007 11/30/2008 Anal sis of Trends
Taxes:
Sales Tax 14,190,000 13,390,000 3,488,282 4,344,339 Shows advances; actual l 09 3%; 2 down 13%
Pr Tax 6,710,000 7,010,000 1,084,800 1,176,099 Growth will not be as stro next year
Transient Occu ancy 2,660,000 2,660,000 945,392 943,699 Trending downward
Utili Tax 3,240,000 3,300,000 1,024,166 1,002,721
Franchise Fees 2,580,000 2,630,000 449,008 447,582
Other Taxes 1,400,000 1,500 000 507,388 310,442 Pro transfer tax down
licenses and Permits 3,030,000 2,980,000 1,036,447 1,330,028 Early ermits for artment ro'ect
Use of Mone & Pro 2,100,000 1,200,000 816 396 508,144 Portfolio shift to safe
Inter overnmental 4,509,871 4,558,892 398,026 145,548 VLF, COPS giant down
Ch es for Services 1,151,685 1,468,000 519,918 632,191 Setuor Ctr tri s, new tree emits
Fines & Forfeitures 800,000 820,000 170,328 217,974
Other Revenue 116 200 100,000 49,917 68,633
Total Revenue U 7% thru Nov; 2% over PY actual b az-end
era ' Ex enditures,
Administrative 1,499,095 1,598,230 533,286 512,593
Law Enforcement 7,982,421 8,505,671 3,233,153 3,448,098 Matches bud et increase
Public & Environ, Affairs 1,275,848 1,547,896 464,158 600,612 Biannual surve , newvideo roductions
Administrative Service 4,540,611 4,281,829 1,615,588 1,509,716 No elections this
Recreation Service 3,910,044 4,398,278 1,490,477 1,472,108 Condor Park ro'ect mgr in ublie works
Community Develo meat 3,722,479 4,339,246 1,292,681 1,253,248 Contract ]an checking down
Public Works 11032 844 11847 487 4 075,816 4,506,952 En ' eerie contracts, onetime maim differences
Total enditures U 5%; e ect bud et savings
Transfers la 1,300,164 70,000 512,500 29,150 Resource Recov , CIP savings last
Transfers Out -18 334,750 •1100 000 -6,520 000 -2 958 300 Corridor Pazk last ear
Net Gainl ss
A