Correspondence - #16 - Laserfiche WebLink

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Orozco, Norma From: Tim Johnson <tjohnson@jlkrllp.com> Sent: Tuesday, June 14, 2022 10:23 AM To: Bacerra, Phil; Sarmiento, Vicente; Hernandez, Johnathan; Lopez, Jessie; Penaloza, David; Mendoza, Nelida Cc: eComment; Downs, Kathryn Subject: Budget Public Comment- agenda item #16 Categories: FYI Mayor and Council (cc Director Downs)...As you consider our upcoming budget(agenda item#16)this evening at the adjourned regular council meeting, I urge you to consider establishing a policy to formally define a Measure X Sunset Stabilization Fund. When this topic was discussed at the Budget Workshop on May 12t", it seemed to have support of the majority of the council. No one spoke in opposition to this item, however I believe at least 4 of those on the dais specifically spoke in support of such a fund. Below is an email with more information as a refresher to this idea. Despite the council support at the Budget Workshop, this idea seems to have gone silent. Now, I understand that some may say that Measure X(MX) is all general revenue and as such any Stabilization Fund would be automatically built into the general fund excess, however I believe that having a formal policy allows the council to keep this at the forefront of importance. This will be one of the most important fiscal matters that our city faces, if not the most important fiscal matters. It deserves the urgency of the council now and in the future. As Director Downs indicated in her presentation,the Ten-Year Outlook shows that in FY 2029-2030, there is expected to be a $16M budget deficit due to the decrease in MX sales tax rate (See page 4 of the Staff Report, "Ten-Year General Fund Outlook", picture below) primarily due to the decrease of MX sales tax rate from 1.5%down to 1.0%. If we do not plan for this now,we will be hurting in the future. A stabilization fund will soften the impact by putting money away today in order to have a softer landing in the future where we can spread the impact over a number of years instead of one big hit. Te -Vir MPWM FWW mufla* W9 ieW! �'NJ }w7 cu�a rra,• ,.M wee uu� �+ r NMI nM+ . +nr +4-1 ram...it The TgIFYear 4fkck cd aLes 1r*C~af FLInd fRd'y rumor 3 MsrlANJ WdgL4 Not Wa&we-X fewenue decfc-YAS i0 me Leib+{ummr df FY 2028•29 By FY 2M.37.Wk eXpW Yo havt m 3rxL.191 uedg�r*e° t t4 apploxawle l SIR llisn The expetted debit tEfriW�G�J MX is currently the reason that our city is able to do some great things. However, as Director Downs has indicated, without MX we would be in a deficit and MX is the reason that we are able to do some of the budget priorities today. However,we need to prepare for the sunset of MX and we need to do this now. Every year that we wait,the bigger the impact will be during the sunset period. I know it feels good to be able to fund everyone's budget priorities 37