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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: OCTOBER 16, 2018 TITLE: PRELIMINARY 2017-18 YEAR END UPDATE (STRATEGIC PLAN NO. 4, 1) EMO RECOMMENDED ACTION Preliminary 2017-18 Year End Update and Audit Process. DISCUSSION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 151 Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER As part of the adoption of the fiscal year 2017-18 City Budget, staff projected a $9.3 million structural deficit that was addressed via the use of one-time funds. During fiscal year 2017-18, a number of City Council approved adjustments were made. These adjustments include, increases to labor and related costs, addition of staffing for the jail, development activities, and funding to address homelessness. These adjustments were partially offset through a combination of cost reductions and revenue enhancements such as maintaining vacancies, new unanticipated Adult - Use Cannabis related revenue and moderate growth in certain revenues. At the May 1, 2018 City Council Meeting as part of the Trial Budget Presentation, staff projected an estimated a structural deficit between $6.1 million to $8.1 million for year-end 2017-18. Most recent projected year-end estimates indicate a structural deficit of $7.2 million. The final structural deficit amount will be confirmed following the completion of the audit review, also known as the Comprehensive Annual Finance Report (CAFR). During the October 8, 2018 Economic Development, Infrastructure, Budget and Technology (EDIBT) Committee, staff presented the preliminary year-end General Fund update for fiscal year 2017-18. The presentation covered an overview of revenues and expenditures, year-end results and outline of the audit process. The following is a summary that highlights the preliminary 2017-18 year-end update: Pending completion of the CAFR, the preliminary general fund actual revenues for fiscal year 2017-18 totaled $230.5 million while expenditure actuals totaled approximately $237.7 million. City departments managed expenditure categories such as personnel, contractual and commodities to minimize the projected structural deficit. At the end of the fiscal year, there was a total of 180 vacancies citywide of which 123 vacancies are attributed to the General Fund. 6513-1