REPORT IN BRIEF

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, a member of the public, or staff.  In prior years, Budget Issues for the upcoming fiscal year have been discussed as a part of the Study Issues process.  This year, a separate public hearing on the Budget Issues is being held to allow for greater participation and input from Council, Boards and Commissions, and members of the public.

Four Budget Issues have been proposed to date for Council consideration.  The first Budget Issue is for the possible funding of non-hazardous Liquidambar street tree removals and alternative tree species replacement.  The second item is for the possible funding of a promotional campaign for Sunnyvale hotels to business travelers, residents, and out-of-town visitors.  The third addresses a possible increase in the amount of money available for neighborhood grants. The fourth deals with one-time costs required to complete the City’s plans for ensuring effective public records management.  The purpose of this hearing is to receive input on these four Budget Issues and solicit and receive any additional Budget Issues that may be raised by Council, Boards and Commissions, or members of the public.

Following tonight’s public hearing, the Council will take action on all proposed Budget Issues at the Fiscal Issues Workshop on January 30, 2006.  The actions will be to refer the Budget Issue to the City Manager for consideration in the FY 2006/2007 Recommended Budget, to drop the Budget Issue, or to defer it to next year’s process.  

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, a member of the public, or staff.  In prior years, Budget Issues for the upcoming fiscal year have been discussed as a part of the Study Issues process.  This year, a separate public hearing on the Budget Issues is being held to allow for greater participation and input from Council, Boards and Commissions, and members of the public.

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

The purpose of tonight’s public hearing is to offer Council, Boards and Commissions, and members of the public the opportunity to provide input on the four Budget Issues that have been proposed for consideration, as well as to identify any additional Budget Issues for Council consideration.  Once this input is provided, it is recommended that Council consider and take action on all proposed Budget Issues at the Fiscal Issues Workshop scheduled for January 30, 2006.  Council’s actions may include referring the Budget Issue to the City Manager for consideration in the FY 2006/2007 Recommended Budget, dropping the issue, or deferring the issue to a future process.

As previously noted, four Budget Issues have been proposed for consideration in the FY 2006/2007 Recommended Budget.  At the October 25, 2005 Council Meeting, Council took action on RTC 05-316 – Liquidambar Street Tree Removal – Study Issue Follow-up.  Council directed staff to submit a Budget Issue item during the FY 2006/2007 budget process for the possible funding of non-hazardous Liquidambar street tree removals and alternative tree species replacement.  If funding is allocated, staff shall submit to Council, for approval, the selection criteria for City-funded tree removals, including financial need.  The Budget Issue Summary Form for the Liquidambar Street Tree Removal item is included as Attachment A of this report. 

The second Budget Issue came as a request from a member of the hospitality industry and the Chairman of the Sunnyvale Chamber of Commerce to utilize some of the incremental funds resulting from the increase in the Transient Occupancy Tax (TOT) to support Sunnyvale’s hospitality industry.  While Proposition 218 prohibits explicitly utilizing TOT funds for this purpose without putting this issue up for a vote, Council could allocate funds to support the hospitality industry from the General Fund.  A group of Sunnyvale business and community representatives is currently exploring the appropriate level of promotion and how to best leverage participation by both the private and public sectors.  This group is expected to have a formal recommendation prepared by the end of FY 2005/2006; however, in the meantime, the purpose of this Budget Issue is to request interim funding to get a limited promotional campaign underway in FY 2006/2007.  Potential uses of the funding for this promotional campaign include print ads, email blasts to local companies showcasing Sunnyvale hotels, and the hiring of an ad agency/marketing firm to develop a promotional campaign for the industry.  The Budget Issue Summary Form for Support of the Hospitality Industry is included as Attachment B of this report.

The third Budget Issue originated during Council’s August 16 consideration of a neighborhood grant program. Council approved annual funding in the amount of $2500 to provide grants to neighborhoods, indicating it would like to consider increasing that funding to $10,000 when reviewing all other budgetary considerations for Fiscal Year 06/07. The Budget Issue Summary Form for Increased Neighborhood Grant Funding is included as Attachment C of this report.

The fourth Budget Issue would fund the second phase of a Records and Information Management plan. That plan was broken into two phases, the first of which dealt with such items as the development of a Citywide records retention plan, the development of a vital records recovery plan, the inventory and indexing of inactive records, and the training of staff in public information laws.  The pending completion of Phase I lays the foundation for Phase II, which would explore the application of document imaging and other advanced technological solutions for effective records management.  The Budget Issue Summary Form for the Records and Information Management Plan is included as Attachment D of this report.

FISCAL IMPACT

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

Conclusion

This report presents four Budget Issues proposed for consideration in the FY 2006/2007 Recommended Budget and solicits input from Council, Boards and Commissions, and members of the public on other potential Budget Issues for Council consideration.  It is recommended that Council take action on the four Budget Issues, as well as any additional Budget Issues brought forth at the public hearing, at the January 30, 2006, Fiscal Issues Workshop to refer the Budget Issues to the City Manager for review as part of the FY 2006/2007 Recommended Budget, drop the issues, 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.  Additionally, the City Clerk informed Boards and Commissions liaisons about the public hearing via email and requested that they provide this information to their members. 

RECOMMENDATION

Staff recommends that a public hearing be held to provide Council, Boards and Commissions, and members of the public the opportunity for input on proposed Budget Issues and to present any additional Budget Issues for Council consideration.  Council action will be taken on all proposed Budget Issues at the upcoming Fiscal Issues Workshop. 

Prepared by: 

Drew Corbett
Management Analyst, Budget 

Reviewed 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 – Liquidambar Street Tree Removal (.pdf format)
B. Budget Issue Summary Form – Support of the Hospitality Industry (.pdf format)
C. Budget Issue Summary Form – Increased Neighborhood Grand Funding (.pdf format)
D. Budget Issue Summary Form – Records and Information Management Plan (.pdf format)