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B. The actions listed in phases 1 through 3 are short-term in nature. In the event the <br />underlying economic situation is expected to last for consecutive years, more permanent <br />actions, such as phases 4 and 5, will be taken. <br />C. Staff will apprise City Council at the regular City Council meeting immediately <br />following any action taken through this plan. Information such as underlying economic <br />condition, economic indicators, estimated budgetary sales tax revenue shortfall, actions <br />taken, and expected duration will be presented to City Council. <br />D. The City Council may appropriate fund balance as needed to cover any estimated <br />budgetary sales tax revenue shortfall. Appropriation of fund balance must be carefully <br />weighted and long-term budgetary impacts must be considered in conjunction with the <br />proj ected length of the economic downturn. <br />E. Actions taken through this plan must always consider the impact on revenue generation. <br />Actions taken should reduce expenses well in excess of resulting revenue losses. <br />F. The following is a summary of phase classifications and the corresponding actions to be <br />taken. <br />1. ALERT: The estimated budgetary sales tax revenue shortfall is less than <br />$200,000, or the estimated annual sales tax revenue is 1 % less than the adopted <br />budget. <br />a. Freeze newly created positions. <br />b. Implement a time delay for hiring vacant positions. <br />2. MINOR: The estimated budgetary sales tax revenue shortfall is between $200,000 <br />and $300,000, or the estimated annual sales tax revenue is 2% less than the <br />adopted budget. <br />a. Implement amanaged-hiring program for vacant positions. <br />b. Reduce the number of temporary workers. <br />3. MODERATE: The estimated budgetary sales tax revenue shortfall is between <br />$300,000 and $400,000, or the estimated annual sales tax revenue is 3% less than <br />the adopted budget. <br />a. Reduce travel and training budgets. <br />b. Reduce office supply budgets. <br />c. Eliminate capital outlay expenses. <br />d. Freeze all computer upgrades and new computer purchases. <br />Replacements for non-working computers are allowed. <br />e. Freeze all external printing and publication expenses, except for <br />legally required notices. <br />f. Scrutinize professional services expenses. <br />g. Scrutinize repairs and maintenance expenses. Examples -vehicles, <br />communications, office equipment, machinery and buildings. <br />City of San Marcos Financial Policy -Proposed Sept 2008 Page 8