Fiscal Year 2013-2015 Special Budget Meeting

.FILED- OFfiCE Of- THE C n i CI EH^ OAKLA,Mrj 2013 APR 25 PM . _ AGENDA REPORT CITY OF OAKLAND TO: DEANNA J. SANTANA FROM: Donna Hom CITY ADMINISTRATOR SUBJECT: FY 2013-2015 Proposed Policy Budget DATE: April 25, 2013 SUPPLEMENTAL The purpose of this supplemental memorandum is to transmit to the ftill City Council responses to questions raised at the April 2, 2013 Special City Council Meeting regarding the Fiscal Year (FY) 2013-2015 Proposed Policy Budget. DISCUSSION General 1) Provide options for how to provide shared prosperity in the event that revenues come in higher than anticipated. The General Purpose Fund (GPF) revenue estimates for the budget years (FYs 2013-15) are one of the major parameters defining the budget development process. The estimates are based on very careful, detailed analysis by the City's professional staff and outside experts. However, during a dynamic economic period, such as the current recovery, the economy and revenues can change in unpredictable ways. In the event that actual revenues are higher than those budgeted, the City Council can decide midyear to appropriate new revenue to any appropriate general purpose. However,, these types of decisions should be weighed in the context of achieving long-term financial stability for the City. If the City Council's priority is to appropriate a share of the revenue overage to City employees, it could structure such a decision in a variety of ways. An option would be to include in the budget resolution a provision that the City Council would deliberate on the issue of linking increasing employee compensation specifically following the issuance of the FY 2013-14 Second Quarter Revenue and Expenditure Report, which would be the earliest instance in which the City will have a solid estimate of actual year-end revenues. There are also many options regarding the form in which additional compensation to employees could be structured, perhaps the most straightforward being a bonus payment, a flat amount per employee or one proportional to an employee's base compensation, or some hybrid thereof Item: City Council April 30, 2013