SUBJECT:               Review and Discussion of Budget Issues for Consideration in Preparing the City Manager’s Recommended FY 2005/2006 Budget and Long Term Financial Plan

REPORT IN BRIEF

This report presents the budget issues for consideration in preparing the City Manager’s Recommended FY 2005/2006 Budget and 10-Year Resource Allocation Plan.  Three budget issues have been proposed for Council consideration.  The first Budget Issue is to mitigate rodents and other pests in the City by spraying manholes and private property.  The second budget issue is to increase the travel allocation for Councilmembers for regional and national conferences.  The third budget issue is to determine the General Fund budget allocation for support of outside groups.

For each budget issue, Council may take action to review it as part of the FY 2005/2006 Recommended Budget, drop the budget issue or defer it to next year’s process.  If Council chooses to review a budget issue, it will be presented as a Budget Supplement in the Recommended Budget.

BACKGROUND

Budget Issues are proposals to add a new service, eliminate a service or change the level of an existing City service.  Budget issues can be proposed by the City Council, Boards and Commissions, staff or a member of the public through the Council.  Budget issues are solicited as part of the Study Issues process. 

EXISTING POLICY

Action Statement 7.1B.1b of the Fiscal Sub-Element of the General Plan states that “when considering new or expanded services, implement those necessary to support the goals, policies, and action statements of various general plan elements and sub-elements.”

DISCUSSION

Three budget issues have been proposed for consideration in the FY 2005/2006 Recommended Budget.  At the December 7, 2004 Council meeting, Councilmember Fowler sponsored a budget issue to mitigate rodents and other pests in the City by spraying manholes and private property.  The Budget Issue Summary Form for this issue is included as Attachment A of this report. 

At the December 16, 2004 Study Issues Workshop, Councilmember Miller sponsored a budget issue to increase the Council’s travel allocation for regional and national conferences.  Mayor Chu co-sponsored this budget issue with the addition of exploring the implementation of specific criteria and processes for Councilmembers to increase their travel allocation.  This review of the criteria and process for increasing the travel allocation is a study and would most appropriately occur as part of the Study Issues process.  Therefore, at this time Council has the option of: 1) approving for review the budget issue to increase Council’s travel allocation, 2) deferring the budget issue until the study has been completed, or 3) dropping the budget issue.  The study would be considered as part of the 2006 Study Issues process at the December 2005 workshop.  The Budget Issue Summary Form for increasing the Council’s travel allocation is included as Attachment B of this report. 

Also at the Study Issues Workshop, Councilmember Howe requested staff provide Council with information on General Fund and CDBG Fund expenditures on outside groups to determine the General Fund budget allocation for these services.  The Budget Issue Summary Form for this issue is included as Attachment C of this report.

FISCAL IMPACT

Each Budget Issue Summary Form provides preliminary cost estimates.  If Council takes action to review a budget issue as part of the Recommended Budget, staff will prepare a Budget Supplement that includes a detailed analysis of the issue, potential adjustments to service levels, and funding options. 

Conclusion

This report presents the three budget issues proposed for consideration in the FY 2005/2006 Recommended Budget.  It is recommended that Council take action on the three budget issues to review as part of the FY 2005/2006 Recommended Budget, drop the issue or defer to next year’s process.

PUBLIC CONTACT

Public contact was made through posting of the Council agenda on the City's official notice bulletin board, posting of the agenda and report on the City's web page and the availability of the report in the Library and City Clerk's office.

ALTERNATIVES

1.        Approve the review of the three budget issues as part of the FY 2005/2006 Recommended Budget.

2.        Drop the three budget issues for consideration in the FY 2005/2006 Recommended Budget.

3.        Defer the three budget issues to next year’s process. 

4.        Take any combination of the three actions for the three budget issues.

5.        Propose alternative actions for each budget issue.

RECOMMENDATION

Staff makes no recommendation.

Prepared by:

Grace Kim

Finance Manager, Budget

Reviewed by:

Mary J. Bradley

Director of Finance

Approved by:

Amy Chan

City Manager

Attachments

A.     Budget Issue Summary Form – Citizen Request to Spray Manholes and Private Property for Rats and Cockroaches(PDF)

B.      Budget Issue summary Form – Increase the Council’s Travel Allocation for Regional and National Conferences(PDF)

C.     Budget Issue Form – Determining General Fund Budget Allocation for Support of Outside Groups(PDF)