Fiscal Year 2013-2015 Special Budget Meeting

projections show that we have $3.02 M of additional on-going revenue in Year 1 and $2.46 M in Year 2. Some add-backs can be justified from one-time moneys, provided we do not expect those items to continue in Years 3 and 4 or we expect to be able to identify replacement funding sources in the meantime. To use one-time funds for staff costs leads to lay-offs and service instability in future years, as we have recently experienced. And, exacerbating this sustainability issue, each position in the 2013-15 Budget will cost up to 15% more in subsequent years due to ever- increasing health plan and pension costs which are borne by the City. One-Time Expenditures This budget proposal includes some one-time expenditures, as there are some one- time revenues available. 1 am treating restoration of some Head Start slots as one- time, because we will be working to get federal funding restored prior to the next. budget. 1 include a one-time allocation to pay for a Nexus Study that*would allow the City to impose an Impact Fee on new development. That cost would more than pay for itself over time, as impact fees would bring in substantial funds for public purposes. I also treat the second year of Affordable Housing staffing as a one-time cost, while we use the next 18 months to study and decide on our long-term approach to funding affordable housing. Other Desired Add-backs There are numerous other service restorations that many of us would find desirable. 1 was not able to include them in my top tier recommendations because we do not- have on-going funds to pay for them, but I list a number of them in the spreadsheet for your information and consideration. I am not addressing any costs associated with labor negotiations in this budget amendment as 1 want to respect the collective bargaining process. Use of "Boomerang" One-Time" Funds from State Clawback of Redevelopment Assets The City will be receiving one-time funds as re-distribution of property tax moneys arising from Redevelopment assets that were taken back by the State. In particular, the City recently remitted $32.5 M to the State. By June 3, we will find out what percentage of that amount will be returned to the City as our share of property tax. I want to highlight the need to use these one-time fund to address one-time expenses, such as the long-deferred maintenance on the City's public buildings and grounds. The most prudent use of those one-time funds is to address capital repairs, paying down our negative internal service funds, or putting money towards our multi-million dollar unfunded liabilities for retiree medical and the PFRS pension. With regard to the additional annual property taxes that the City will receive from former Redevelopment Areas, I want to note that the Mayor's budget already