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

Community Development 10 Year Forecast

50%

43%

40%

30%

19%

20%

7%

10%

0% -8%

0%

YEP

Rec

Rec

Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

17-18 18-19 19-20 20-21 21-22 22-23 23-24 24-25 25-26 26-27 27-28

-10%

-15%

-22%

-20%

-28%

-30%

-34%

-40%

-40%

-46%

-50%

Fund Balance Goal of 30% of Expenditures

Community Development 10 Year Forecast

The Development Services Fund is an economically sensitive revenue category and is directly linked to private development activity. Based on projections provided by the Development Services Department, construction activity is anticipated to continue at moderate levels for FY 18-19. Revenue is estimated at $4.9 million and $5.3 million for FY 18-19 and 19-20, respectively. The revenue is expected to remain at a stable level of approximately $6.0 million per year, with the CPI escalation in the ten-year forecast. The Development Services Fund expense budget is $5.9 million for FY 18-19 and $6.0 million for FY 19-20, an increase of approximately 7% from the mid-cycle revised estimate. The timing of fee increases, new projects unsupported by fees, continued implementation of Measure S, and the potential impact from the new affordability housing goals will require the City to revisit the fee structure periodically. There is available fund reserve to support the fund’s operating deficits in the two-year window, however, a General Fund support may be required in future years due to the aforementioned reasons. Continued implementation of the Zucker study will help determine whether this will be required.

22 RECOMMENDED BUDGET MESSAGE