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City Council <br />Meeting Minutes August 12, 2021 <br />Mr. Lumbreras acknowledged the hard work of staff. When the pandemic <br />began it brought uncertainty into all aspects of our lives. While the health and <br />safety of our citizens is paramount, we also had to stay aware of our City's <br />fiscal health, requiring a lot of belt -tightening throughout the organization. We <br />reduced expenses, implemented a managed hiring program, delayed some <br />projects, and cut supplies and contractual services to close last year's deficit. <br />While we would be in a much worse position without those cost reduction <br />measures, all of the belt -tightening has started to affect services. This budget <br />has been difficult as we try to address some of the issues of our growing <br />community while being constrained by the amount of ongoing expenditures we <br />can add. One benefit of previous actions is that our fund balance is healthy, <br />and we are proposing to use this to pay for many of the one-time needs that <br />have been deferred for a while. Examples of one-time expenditures include <br />vehicle and equipment purchases for our Parks and Public Works Departments <br />instead of relying on leases. Another is infrastructure and software for <br />Information Technology. It is great that we can address some of these needs, <br />but it is not sustainable to rely on one-time funds to meet the demands of our <br />community for programs and services. With the continued uncertainty from <br />the COVID-19 Delta variant, we took a conservative approach in our <br />assumptions. In order to close the gap between revenue and expenses that was <br />presented in July, staff re-evaluated the sales tax projection, moved <br />Community Enhancement fees to the Special Revenue Fund, and proposed the <br />dissolution of the Blanco Vista Tax Increment Reinvestment Zone, or TIRZ #2, <br />to realize the associated cost benefits. Many in our community continue to feel <br />the economic impacts of the pandemic, and this budget reflects our <br />commitment to be responsible stewards of taxpayer dollars. Our departments <br />once again went through a zero -based budgeting process to ensure operating <br />funds are used as efficiently as possible. The budget has also been structured in <br />such a way that we will evaluate the revenue numbers midway through the year <br />and determine if they look favorable enough to hire additional personnel to <br />address priority areas. Due to ongoing uncertainty, the proposed budget <br />includes a 2 percent cost of living increase for all non -civil service employees <br />effective in October, and we will look at the remaining 2 percent mid -year. At <br />previous budget meetings staff received extensive direction from City Council <br />that is incorporated in the budget before you. This includes keeping our <br />property tax rate flat, maintaining healthy fund balances, addressing social <br />services, and prioritizing areas such as a bilingual program, veterinary services, <br />and weatherization needs. Not all personnel requests made by the Directors are <br />addressed, but there are certain priority areas that we will have to look at <br />mid -year and only if revenues are coming in favorably. These areas include <br />City of San Marcos Page 2 <br />