FY 2018-19 and 2019-20 Adopted Operating and CIP Budget

Transient Occupancy Tax TOT revenue for FY 18-19 and FY 19-20 is estimated at $2.8 million and $3.1 million, respectively. The City has experienced a historic high level of revenue from TOT due to a strong economy, the regional use of the City's Outdoor Sports Center and Aquatics Center, and a burgeoning tourism economy in the past few years. However, it appears this revenue category has plateaued and remained flat since FY 16-17. It is estimated that flattening will continue with any increase mainly from the anticipated opening of the 60-room boutique hotel in Downtown in FY 19-20. General Fund - Discretionary Expenditures From a spending perspective, the Council has discretion on how to spend approximately $29.1 million of the $40.1 million in General Fund revenue. This is because over $11.0 million in General Fund revenue is related to a specific service and can only be used to provide that service (e.g., recreation services). The Biennial Budget recommends that the Council allocate its discretionary funds as depicted in the following chart. As demonstrated, public safety continues to be the number one priority as 76% will be used for Police and Fire services. The remaining 24% of discretionary revenue is appropriated to pay for Economic Development, Finance, Human Resources, City Clerk, Recreation Services, Environmental Services, Streets, Parks, Public Facilities, Downtown Maintenance, City Attorney, and City Manager services.

Economic Development 3%

Recreation & Community Services 3%

Other * 5%

P ublic Safety 76%

Administration 7%

Street Maintenance 3%

Pavement Rehab CIP 3%

*Other includes: Downtown Maintenance, Park Maintenance, OPEB, Environmental Programs

General Fund – Expenditures The General Fund expense budget is $41.9 million and $42.5 million for FY 18-19 and FY 19-20, respectively. FY 18-19 salaries and benefits increased by 4% or $0.8 million from FY 17-18 year- end projection primarily due to scheduled pay increases per the City’s memorandums of understanding (MOU) with our three bargaining groups, pension increases, additional funding of

18 RECOMMENDED BUDGET MESSAGE