Recommended FY 2022-2024 Operating Budget and CIP

Recreation Revenue Recreation services revenue, the City’s third largest revenue source of the General Fund, has been the hardest hit categories due to the closure of facilities during the shelter-in-place orders as well as the prolonged in-door mask mandate. Staff has implemented steps to lessen the impacts to the City’s fiscal sustainability in general and recreation services. Steps have included the implementation of virtual recreation programs and classes, and working with the YMCA to amend the contract during the pandemic from a fixed cost plus profit sharing to reimbursement of actual cost of a reduced workforce plus small overhead. In addition, staff has deferred the hiring of Council approved additional full-time personnel until staff has seen a consistent increase in registration and services. Recreation services projected revenue for FY 22-23 and FY 23-24 is $6.1 million and $6.8 million, respectively. Staff does not expect recreation services revenue to return to the pre-pandemic levels until FY 24-25. Transient Occupancy Tax As for the City’s Transient Occupancy Tax (TOT), or hotel tax, based on the current occupancy estimates and the projection of occupancy and daily rates to remain below pre-pandemic levels for months to come, the City’s hotel tax collection will remain low compared to pre -pandemic levels. It is estimated that current year hotel tax revenue will come in at a reduced budget amount of $2.2 million. The estimates for FY 22-23 and FY 23-24 are $2.6 million and $2.8 million, respectively. The cumulative impact for the four fiscal years is approximately $4.8 million. Like recreation services revenue, staff does not expect TOT to return to the pre-pandemic levels until FY 24-25.

The table below summarizes the actual and projected revenue loss by major revenue categories through FY 22-23 from the Covid-19 pandemic:

Covid-19 Pandemic Financial Impact - Revenue Loss by Type

Revenue Type (Amount in Millions)

Actual FY 19-20

Actual FY 20-21

Estimated FY 21-22

Forecast FY 22-23

Total

Property Tax

$

(0.1) (0.6) (2.0) (0.8) (0.9) (4.4)

$

- -

$

- -

$

-

$

(0.1) (0.6)

Sales tax

Recreation

(4.6) (1.8) (0.9) (7.3)

(3.4) (1.3) (0.5) (5.2)

(2.4) (0.9)

(12.4)

Hotel Tax (TOT)

(4.8) (2.3)

Development Services

Total

$

$

$

$

(3.3)

$

(20.2)

General Fund – Expenditures

The General Fund expenditures budget is $52.5 million and $54.1 million for FY 22-23 and FY 23 24, respectively. FY 22-23 recommended salaries and benefits increase by 11% or $2.8 million from the FY 21-22 Amended Budget primarily due to the additional staffing to enhance public safety,

BUDGET MESSAGE 21