FINANCE AND INFRASTRUCTURE COMMITTEE

Executive Summary

MAY 23, 2001

The meeting was convened at 2:30 P.M.

a. Consent Items:

1. April Monthly Report (Auditor)

Upon motion of Councilmember Reed, seconded by Councilmember Campos, the Committee approved the Consent Item.

b. Monthly Financial Report for March 2001

Upon motion of Councilmember Reed, seconded by Councilmember Campos, the Committee accepted the staff report.

c. General Airport Revenue Bonds, Series 2001A – Plan of Finance (Finance) –

[Rules Committee referral of May 9, 2001]

RECOMMEND DEFFERRAL TO JUNE 13, 2001

Upon motion of Councilmember Reed, seconded by Councilmember Campos, the Committee deferred the report to the June 13, 2001 Finance and Infrastructure Committee meeting.

The Redevelopment Agency handled items d through f.

g. Oral Petitions

Bill Chew, Public spoke on the possibility of televising future meetings and on potholes and trenches on streets and sidewalks.

h. Adjournment

The Committee was adjourned at 3:15 P.M.

Councilmember Pat Dando, Chair,

Finance and Infrastructure Committee

FINANCE AND INFRASTRUCTURE COMMITTEE

Meeting Report

May 23, 2001

PRESENT: Chair Pat Dando, Councilmember Chuck Reed, Councilmember Nora Campos

ABSENT: Councilmember John Diquisto (excused due to illness)

5 STAFF: Kay Winer, Bill Hughes, Jerry Silva, Larry Lisenbee

The meeting was convened at 2:30 P.M.

a. Consent Items:

2. April Monthly Report (Auditor)

Upon motion of Councilmember Reed, seconded by Councilmember Campos, the Committee approved the Consent Item.

b. Monthly Financial Report for March 2001

Larry Lisenbee, Budget Director gave an overview of the report. He stated that through March, despite numerous signs of impending slow down, revenues continue to meet or exceed expectations. Overall, collections were still ahead of budget, which allowed staff to bank additional funds at Mid-year and to recognize additional $17 million in fund balance as part of the proposed budget. Larry indicated further that there are initial signs of softening in both the Construction and Conveyance tax and the TOT. The large hotels tracked by the Convention and Visitor'’ Bureau have seen a 19% drop in occupancy rates (with April being even higher at 23%). That will mean lower revenue. Staff had predicted a drop-off and still believes this will be within budget at year-end.

Larry stated that overall, expenditures in departments continue to be running on budget, although in a few cases, staff will be making some adjustments between appropriations. Police and Fire expenditures are now at or below budget, with Fire running higher OT expenses than budgeted, but offset by salary savings. There is evidence of the impact of the downturn in the local real estate markets in the Special Funds category. March receipts were fine (up from last year) but April and May receipts were both down significantly (23% in April, 32% in May). Because staff anticipated this, the City is well positioned to absorb it. Overall, staff feels the slowdown is at a crucial point and will be watching the impact closely. The June Sales Tax receipts will be revealing.

Chair Dando stated that historically, the City seems to be 18 months to 2 years behind the general economy as far as realizing the downturn.

Larry replied that areas like Property Tax do lag quite a bit. Sales Tax will be the first area to show signs of a downturn.

Councilmember Reed asked if there were any leading indicators in Planning and Building.

Larry answered that things are slowing down now, particularly in Construction Tax.

Councilmember Campos asked what is predicted for Sales Tax?

Larry answered that the information is received on a quarterly basis so there has never been a way to accurately predict the Sales Tax.

Chair Dando asked why departments other than Police and Fire show overtime expenditures.

Larry answered that this is due mainly to back-filling vacancies within the departments.

Kay Winer, Deputy City Manager added that an example of this would be in the Information Technology Department where a 21% vacancy rate required additional overtime.

Councilmember Reed asked what will happen when the State begins taking money from the City.

Larry answered that there is no indication that this will happen in the immediate future.

Councilmember Reed asked if Council Committee meetings are broadcast.

Staff’s response was that in Room 204, meetings can be heard on the “squawk box”, but there is currently no capacity for the public to receive either audio or video transmission of Council Committee meetings.

Councilmember Reed indicated that he would bring this item forward to the Rules Committee in the future.