65B - 1ST QUARTER BUDGET UPDATE - Laserfiche WebLink

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Fiscal Year 2017-18 First Quarter Budget Update November 21, 2017 Page 3 issued in December 2017, affirming the projected General Fund fiscal year 2016-17 operational deficit. CURRENT FINANICAL TRENDS FOR FISCAL YEAR 2017-2018 Since fiscal year 2012-2013, general fund revenues have increased on average by 2%. While the "Top Six" general fund revenues have increased by 4%, other department revenues have primarily remained unchanged. Furthermore, general fund expenditures have risen by 4% due to increasing salary and benefit costs such as retirement and medical contributions. As a result of some of the budget adjustments, along with the fact that revenues have been growing at a slower rate than expenditures, the projected deficit for FY 17-18 climbed to $9.3 million. However, recent decisions have resulted in improving the City's overall budget outlook. On August 1, 2017, the City Council approved terms and conditions with the US Marshals to increase additional bed space over a two-year period. The projected result is a net positive impact of $4 million during the current fiscal year. Furthermore, on October 17, 2017 the City Council conducted a public hearing to adopt an ordinance allowing for the regulated adult use/retail sales and expansion of cannabis commercial activities. Upon adoption of the ordinance, an estimated range of projected net revenues (less enforcement and prevention plan expenditures) is $3 million to $6.75 million. Additionally, the City has successfully concluded negotiations with one bargaining unit (Police Officers Association) with an estimated cost of $2.7 million. Currently the City is in negotiations with the remaining bargaining units and as a result does not have a final figure for additional costs that may occur. The implemented actions noted above have resulted in an improved general fund financial position specifically, Staff projects a budgetary deficit of $600,000 for fiscal year 2017-2018, instead of the original projected deficit of $9.3M. FISCAL YEAR 2017-2018 General Fund: 15t Quarter Update General fund revenues collected during the first quarter (July — September) amounted to $22.6 million. This amount represents 10% of the general fund budget and is slightly below the first quarter trend by 1%. While Sales Tax and Property Tax continue to demonstrate growth, the City's Utility User Tax still remains impacted primarily in electric utility. The impact is attributed to reduction in consumption due to cooler weather, and the Cap -and -Trade Program, while costs to produce electricity remain low. The'Business Tax on medical marijuana has displayed signs of improved growth largely resulting from City Council directives allowing for the opening of additional operating dispensaries and recent changes to the ordinance (signage, hours of operation, delivery services, etc.). Currently, there are two additional dispensaries that are in the process of obtaining a business licenses which will bring the total of dispensaries operating within the City to nineteen. L•