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Consider the FY 2020-21 Draft Budget and the Seven -Year CIP <br />June 2, 2020 <br />Page 6 <br />General Fund Ten -Year Outlook <br />The Ten -Year Outlook starts with the proposed budget in year 1, and applies the following <br />assumptions for years 2-10. The Ten -Year Outlook is only one potential scenario, and actual <br />results will vary. <br />The Ten -Year General Fund Outlook includes: <br />• Annual revenues and expenditures increase by CPI as forecasted by the California <br />Department of Finance (3.7% for FY21-22 and 3.8% thereafter). <br />• An assumed reduction of property tax revenue in FY21-22, resulting from decreased <br />property sales and assessments due to COVID-19. <br />• Measure X sales tax rate decreases from 1.5% to 1.0% in 2029. <br />• Expiration of the Vehicle Incentive Program in 2024. <br />• Removal of one-time items from the budget in future years. <br />• Increasing pension contributions based upon information provided by CalPERS. Staff used <br />the pension outlook tool provided by CalPERS to estimate the impact of the expected <br />current year 0% investment return on future contribution rates. <br />• Retirement of police facility debt in 2024. <br />Results of the Ten -Year Outlook indicate there is a General Fund revenue shortfall to sustain the <br />current expenditure structure. Staff recommends the City Council conduct a comprehensive review <br />of the current service model, and make changes to the budget structure to realign expenditures <br />with revenue. <br />Ten -Year General Fund Outlook <br />N $530 <br />`0 <br />$490 <br />$460.1 <br />$479.2 <br />$447.6 <br />$450 $429.9 <br />$410.7 <br />$410 <br />$380.9 $397.0 <br />$361.6 <br />$370 $394.7 <br />$341A $380.2 $382.5 <br />$328.4 $366.3 <br />$330 <br />$338.7 <br />$325.9 <br />$307.4 $314.0 <br />$290 <br />$250 <br />FY20-21 FY21-22 FY22-23 FY23-24 FY24-25 FY25-26 FY26-27 FY27-28 FY 28-29 FY 29-30 <br />♦Revenue �Expencitures 6 Transfers Out <br />