Meeting Date: 06/21/2011 Page 3 Agenda Item #VII.A.
year. Procuring low-cost, low-interest loans from USDA Rural Development to fund needed capitalimprovement projects will be a focus also.Due to careful planning and spending by all departments, we anticipate a budget surplus in the general fundfor fiscal year 2010-
2011. This will help further capitalize the City’s reserves into fiscal year 2011
-2012.Best management practices dictate that a prudent general fund reserve for lean fiscal years total to 15 to 20percent of total operating expenditures. In fiscal year 2011-2012, we anticipate an ending fund balance of $2.4 million, which equates approximately to 53 percent of recommended operating appropriations. Therefore, I recommend using a portion of that reserve to accomplish proposed capital projects and relieveredevelopment and enterprise funds of some financial burden. Given the difficult circumstances facing theCity, I believe the short-term use of reserves for these purposes is sensible. The remaining reserve must bemaintained to prepare the City for real and potential liabilities, including, but not limited to:
Potential actions against the Redevelopment Agency, which could have a significant impact to theGeneral Fund
Continuing to realign the RDA and Enterprise funds with the General Fund
Unexpected revenue declines or failure to receive revenues as estimated
Capital improvements City-wide that have been deferred but must be addressed
Unexpected changes to the national economy that could negatively affect the local economy
Potential state action against local government. We face significant challenges moving forward. Depressed revenues, increasing costs, and threats of state
action against local government require diligent financial planning and execution. But that’s just one side of
the coin.Opportunities exist to improve efficiency, reduce costs, enhance revenue sources, and find more effective ways to deliver services to the community. The City Manager and Management Team will work to capitalizeon these opportunities, which include securing the annexation of South Main Street, evaluating andrecommending revisions to current fees for service, maximizing redevelopment capital, and exercising new methods of controlling costs. The role of Council as a policy making body is integral to moving the City forward. The success of this
financial plan is contingent on Council’s commitment to keeping focus on the bigger picture.
Redevelopment in California will change as the state continues its assault on it. The Agency Board musthave a candid discussion of priorities and provide direction to staff as to where to focus available resources.Local businesses will continue to face difficulty this year, and the role of business retention will be even
more important. The City’s commitment to economic developm
ent must be maintained through active
collaboration with the Chamber of Commerce, the Main Street Association, and the County’s marketing
program. This budget maintains the minimum amount of personnel needed to perform the basic level of services tothe community and achieve the goals that Council has prioritized. But it stretches resources significantly and imposes greater responsibility on each individual to perform at their best.
Staff addressed the Council's issues and concerns from the budget workshop on June 7, 2011, and hasprepared the budget document to include the following changes:
Revised the Administrative Services section of the City Hierarchy (pg. 9) to include specific HR functions