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City Council Meeting Minutes June 30, 2020 <br />are directly related and impacts personnel cost. <br />Hotel Occupancy Tax (HOT) Update: <br />The comparison below of FY19 due to a stable year. <br />FY20 Revenue: Projected is 57% less than FY19, or $957K less than budget <br />FY20 Expenditures: Reduced 700K with use of fund balance <br />FY21 Revenue: Assumes 30% less than FY19 <br />FY21 Expenditures: Reduced all programs and operating, council approved use of <br />$200K of reserves to fund arts programs <br />FY20 FY23 No assumption of additional General Fund transfers to balance budget <br />Staff provided the budget timeline and next steps which include the following: <br />Record vote on tax rate on August 4th <br />Proposed Budget and Utility Rate Recommendation to be held on August 13th <br />Public Hearing and 1st reading to be held on Sept. 1st <br />2nd reading & Budget adoption to be held on Sept. 15th <br />Ms. Reyes spoke of the results of the Comptroller's ruling on FY22 and FY23, <br />along with Senate Bill (SB) 2 and property tax appraisals and how we need to <br />project these into the revenues. <br />Ms. Reyes spoke briefly of the anticipated FY22-23 of the Comptroller's ruling, <br />Senate Bill (SB) 2 and property tax appraisals and how these need to be projected <br />into the revenues. <br />Council Member Derrick inquired about which areas we are short on staff. Mr. <br />Lumbreras stated that whatever the deficit is and what direction we go in terms of <br />lowering the tax rate, we will proceed with a methodical and sequential process <br />which may include service level reductions. Mr. Lumbreras stated we are not going <br />straight to layoffs but will work through the list. <br />Council Member Derrick noted that if we do not stay with our current tax rate, we <br />will be in serious trouble. Ms. Neel noted that, in addition, we must be ready for <br />the impacts of SB 2 which is reduced rate in the future. <br />Mayor Hughson noted that when Service Level Reductions were mentioned at a <br />previous meeting, she thought it would be specific programs, not reduction in staff. <br />Mr. Lumbreras noted there are a number of choices to be made, but the first is the <br />tax rate set by Council. He will then work through the numbers. <br />City of San Marcos Page 5 <br />