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NEEDS to prepare for this drop in revenue now. I applaud the council members/mayor that brought this up at your May 2nd meeting. Even if the city is utilizing MX funds for one time expenditures,when one time expenditures are utilized each year,which they have been,they become viewed as recurring expenditures. Expenditures which the city become reliant upon. If something is truly one-time, ask yourself, can we just not do that this year and save the money? If the answer is yes, well,then it is time to start making those decisions. If the answer is no we need to do that...I question whether it is truly meets the spirit one-time spending. If we make changes to our spending now, couple that with increasing business activity and hence revenue in our city,we may be able to make the MX rate reduction impact more of a gradual slide instead of a drastic cut. Again, I know that it will be easy to say that MX spending is focused on one time items, but when that spending is happening year after year, it becomes part of the fabric of our city. I dub this Ten Year Outlook as my"scary chart" because it is scary to look at in 2029 and forward. The yellow(I added) below is the scary part. That shows our shortfall where projected Spending will exceed projected Revenue. What will the city look like with a $35M+shortfall year after year? What can we do now to prepare for that shortfall? The earlier we plan for this gap,the easier it will be to lessen the impact on our residents, businesses,visitors, and city as a whole. V, $EW fi $613.7 Sao-a $482.5 $489.9 S4U., $470 S455.0 5474.7 $440.2 $458.'3 5460.2 9453.3 $420.6 $446.8 $430 5413,0 5438.2 5 399.8 5425,5 $404-0 $390 5397.3 $350 FY23-24 FY24.25 F'Y25-26 FY26-27 FY27-26 FY20-29 FY29-30 FY30-31 FY31-32 FY32-33 -RCYCrtut{ F1L°i14�1KkSJ I ask that our city consider a few action items now in order to prepare for the drop: 1. Direct staff to prepare a big picture pro-forma budget(not line by line but big picture)to illustrate what our city services will look like based upon the drop. What services will need to be lessened, how this will impact our residents/business, etc...By doing this,we will see what our city will look like after the MX rate reduction. 2. Direct staff to come up with a MX Sunset Plan with goals of such plan and concreate action steps to achieve those goals. Presumably,this council's feedback is imperative in coming up with any Sunset Plan. I would anticipate that this plan would include both spending reductions AND also revenue generation. 2