On March 7th the City Council reviewed the City’s mid-year financial results, which show that the recovery from the pandemic is ahead of plan. Revenues for the fiscal year ending June 30, 2022 are now expected to increase by $1.5 million, while expenses are increasing by only $410,790 resulting in improved General Fund Reserves.
Staff recommended and the City Council approved specific increases to the fiscal year Revenues budget for Transient Occupancy Tax (hotel tax) by $900,000, Sales Tax by $410,000 and Parking revenues by $200,000. Approved expenditure increases were spread across a number of areas with the largest being an increase to the Fire Protection program in the amount of $125,000.
Based upon these results the General Fund Contingency Reserve will increase by $945,209 bringing the projected fiscal year total to $4.3 million, which represents 103 days of operations. Council also added $100,000 to the Housing Reserve bringing the total to $300,000.
Measure Q Revenues, which are tracked separately, are projected to increase by $500,000 bringing the fiscal year total to $2.7 million. This means that since its inception in fiscal year 2017 the City will have collected $13.8 million in Measure Q revenues. Thus far the Downtown Streetscape was funded for almost $7 million and the Undergrounding funding will total $3 million by the end of this fiscal year. The Measure Q Reserve balance at the end of this fiscal year will total $3.7 million.
These are favorable results that don’t bring the City back to pre-pandemic condition, but the combination of improving revenues and continued spending limits have allowed the City to maintain essential services to the community and begin building the City’s General Fund Reserves.
This is great progress that reflects a good balance of controlled operational spending and project spending that is limited to top priority Capital projects and Special projects. As revenues fully recover over time and the staff capacity returns to full operational strength, the City will be able to undertake additional projects on its wish list.
We should commend our City Manager, Finance Manager and City Council for exercising good fiscal judgement and control in guiding the City through this difficult period.