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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 11/30/2001 *PLEASE NOTE: Since the Glendale City Council does not take formal action at the Workshops, Workshop minutes are not approved by the City Council. MINUTES COUNCIL GOAL SETTING SESSION Civic Center, Onyx Room 5750 West Glenn Drive Glendale, Arizona November 30, 2001 7:30 a.m. PRESENT: Mayor Elaine M. Scruggs, Vice Mayor Thomas R. Eggleston, and Councilmembers Joyce V. Clark, Steven E. Frate, David M. Goulet, H. Phillip Lieberman, and Manuel D. Martinez ALSO PRESENT: Martin Vanacour, City Manager; Ed Beasley, Assistant City Manager; Rick Flaaen, City Attorney; and Pamela Oliveira, City Clerk 1. CITY COUNCIL 2002-03 GOAL SETTING SESSION CITY STAFF PRESENTING THIS ITEM: Mr. Tim Ernster, Deputy City Manager; Mr. Ken Reedy, Deputy City Manager; Mr. Charlie McClendon, Budget Director; Ms. Pilar Aguilar, Budget arid Rate Manager; and Mr. Art Lynch, Finance Director. Each year the Mayor and City Council hold a special meeting to discuss their vision for the City of Glenda'e and to determine goals and priorities in the coming fiscal year. Budget staff presented the Five-Year Economic Forecast and other pertinent information to assist in the goal-setting process. Last year's Council Goal-Setting Workshop was held on November 16, 2000. A status update of the goals established at that meeting were presented during this year's Workshop. The agenda for this City Council Workshop was posted and all legal requirements for notification were met. Copies of the agenda and packet have been provided to the press and media according to City policies and procedures. This goal-setting session is the first step in the Fiscal Year 2002-03 budget process. The goals developed at this meeting will set the stage for developing the Fiscal Year 2002-03 budget. The recommendation was to discuss the issues presented, develop the Council Goals Statement for Fiscal Year 2002-03, and provide staff with direction. - 1 - Mr. Beasley identified the September 11 t attacks, the State shortfall, the possibility of a food sales tax repeal that could cost the City $4.7 million, and the possible court reorganization as some of the challenges the City faces. He said, in response to those challenges, they had prepared two different budgets, one based on the current economic situation and the second based on the food sales tax being repealed. Mr. Beasley explained that, under the first scenario, limited positions would be added, there would be no baseline increases and the budget base savings would be placed towards inflationary increases within the budget. He said, under the second scenario, they would look at eliminating some programs, look at positions, limit increases, and restrict new projects. He stated that, in both cases, they would examine new revenue sources and how to increase current opportunities. He stressed the fact that public safety would be maintained to the standards required by the Mayor and Council. Mr. Beasley stated that they believed they could deal with the challenges and felt that great opportunities for increased sales tax revenues, assessed valuation increases, and development fee increases exist. He reported that a series of workshops would take place in January and February of 2002 to allow citizens an opportunity to understand the City's business practices. Legislative Update Ms. Rudibaugh a.affy reported that the State Legislature was in day 18 of its session and, to date, had called five items, including the budget, into special session. She stated that, although the Governor's Office and the Joint Legislative Budget Committee (JLBC) had reached concurrence that the budget shortfall for Fiscal Year 2002 totals $675 million, they still did not agree as to the Fiscal Year 2003 estimated shortfall. Ms. Rudibaugh Duffy said the Governor's Plan was presented to the Legislature, but did not receive a lot of support. She explained that the Governor's plan would have impacted all communities, except for those communities where the impact would have been $50,000 or less per year and counties where the impact would have been $200,000 or less per year. She stated that other legislative proposals were being considered. She noted that the one that would have impacted the City died in the House Appropriations Committee. She expressed her opinion that the Legislators understand how a reduction would effect the cities and the impact it would have on interest tax. She explained that Proposition 108 requires a two-thirds vote to increase taxes or to reduce State-Shared revenues without a corresponding tax cut. She stated that the Legislature does not have the two-thirds vote necessary to reduce State- Shared revenues. Ms. Rudibaugh Duffy reported that a budget proposal passed the Senate and was on its way to the House for their consideration. She said it only deals with Fiscal Year 2002 and does not have anything to do with State-Shared revenues. - 2 - Ms, Rudibaugh Duffy noted that House Bill 2017 failed by a vote of 13 to 2. She said she was told by Mr. Sensman that the Speaker understands where the body stands based on that vote and that he clearly understands the importance of public safety. Councilmember Lieberman asked Ms. Rudibaugh Duffy for her opinion as to whether the 4% reduction would pass. Ms. Rudibaugh Duffy expressed her opinion that it would not. Councilmember Lieberman pointed out that most economists in the State believe that the State is on the verge of another boom. Ms. Rudibaugh said the Senate and House have conflicting opinions in terms of the next fiscal year. She noted that the Senate bill dips irro the Rainy Day fund, while the House is hesitant to do so for fear of the State's uncertain economic future. Councilmember Lieberman asked if next year's budget would be affected due to the lag in funding. Mr. McClendon explained that there is a two year lag on income tax, but sales tax only lags by one month. In response to Mt. Beasley's question, Ms. Rudibaugh Duffy said she was 95% sure that the 4% reduction would not occur. Fiscal Year 2002-03 Goal Setting Session Mayor Scruggs welcomed those who were present. She explained that the Council was faced with an unusual set of circumstances - the economy, the legislative problem, and the fact that citizens might choose to reduce the amount of revenue that the City has to carry out activities already in place. She said the Council would be building two budgets in preparation of the outcome of the vote in May of 2002. She asked that staff devise a method for showing what services and programs could be reduced and what the impacts of those reductions would be. She stressed the fact that the citizens of Glendale need to understand the implications of the May 2002 vote. She said staff would present options for increasing revenues in other ways, which may or may not be acceptable to Council. She suggested that a mechanism for soliciting citizen comments about possible cuts be developed. She stated that this could be a wonderful opportunity for a community dialog. Councilmember Martinez asked how far they could go in getting information to the public with respect to the food sales tax repeal. Mr. Flaaen advised Councilmember Martinez that the State Statutes prohibit a city from using its finances, resources and employees to influence a local election. He explained that employees are prohibited from going out and campaigning for or against an item; however, individual Councilmembers can express their personal position. He said the City can provide information items as long as they do not advocate a particular position. - 3 - Mayor Scruggs said the food sales tax repeal is very popular and is expected to pass; therefore, it is only fair that those who vote to repeal the food sales tax tell the Council which services and programs should be reduced or eliminated. Mr. Flaaen said asking for citizen input would be acceptable. Councilmember Martinez asked if they could send a message to contacts in their database asking for their input as to which services they would be willing to forego and giving an example of the actual savings typical families would realize if the food sales tax was repealed. Mr. Flaaen said they could do so, as long as it was done in an effort to collect citizen ir put rather than to influence their position. Mayor Scruggs asked how they could make it understood that the food sales tax is paid to the City from various jurisdictions, but the services those taxes support would be taken away from Glendale citizens if the tax was repealed. Councilmember Lieberman said, according to current Arizona law, if your annual net income, after medical expenses, is less than $22,120, you are entitled to obtain food stamps, and, consequently, would not pay the food tax. He stressed the fact that his comment was that the money saved would not buy a package of cigarettes or beer, and not that the poor spend their money on cigarettes and beer. Councilmember Lieberman stated that the Mesa Tribute newspaper had quoted him correctly, whereas Channel 12 television misinterpreted his comments by using only excerpts thereof. Mayor Scruggs clarified that, during the Special Transportation Election, Councilmembers were not prevented from expressing their support for the proposition, but they were precluded from using City funds or resources to do so. Mr. Flaaen agreed with Mayor Scruggs. Mr. McClendon referred to a quote from Alan Greenspan on the economic effects of the September 11th tragic events. He said it was important that the Council remain open to making revisions based on changing economic conditions. He stated that he agreed with Mr. Greenspan's statement that the underlying economy remains strong and that the country will recover and prosper. Mr. McClendon explained that they would be developing alternative budget processes. He explained that the first budget process assumes no state reduction of shared funds and that the food tax remains in place. He explained that, under this scenario, there would be no new ,00sitions, no increases to existing line items, and the reallocation of base budgets to cover inflation. He said they believed they could balance this budget without the need to eliminate positions or services. Councilmember Leberman asked if the restriction on new positions would include public safety. Mr. McClendon responded that it would include the General and Street Funds categories. -4 - Councilmember Martinez asked if certain Capital Improvement Projects (CIP) with respect to street improvements could be accelerated. Mr. McClendon said, on the whole, the transportation package approved by the voters was designed so that many street improvements are to be accomplished in the early years of the program. Mayor Scruggs asked how an item could be moved up when the amount of tax coming into the City was being reduced. She noted that the food sales tax repeal would affect transit and public safety dedicated funding. She asked if a ballot initiative could undo previous voter directives. Mr. Flaaen stated that it could. Mayor Scruggs stated that the Council had made a commitment to the voters to do certain things in the first five years, but those commitments were based on revenue projects that would no longer be valid. Mr. McClendon agreed. He stated that a reduction in the amount of money coming to the City would result in adjustments to the transportation program. Mayor Scruggs asked if General Fund monies would have to be diverted to Transit to uphold the commitments they made to the public. Mr. McClendon said they would either have to supplement the funds or spread out the time period over which the improvements occur. Mayor Scruggs questioned how they could spread the program out when they have made certain commitments to the voters. Councilmember Clark asked Mr. McClendon how much he anticipated would be added to the Transportation Fund in 2003. Mr. McClendon responded that he anticipated it to be $17 million. Mayor Scruggs stressed the importance of tracking all impacts. Mr. McClendon reviewed the goals set by the Council last year. He stated that the goal to add $1 million to the Economic Opportunities Fund had been accomplished and three major projects were already available because of that funding. He said the goal to set aside $330,000 for the acquisition of property was met and $157,450 remains available. Councilmember Clark asked where the property which was acquired was located. Councilmember Frate replied that the property was located at 47th and Grand Avenues. Mr. McClendon stated that the Visual Improvement Program was increased by $50,000 which, combined with what was left from previous years, leaves a remaining balance of $629,847. He said, however, there are projects ready to come before the Council that will obligate a majority of the remaining balance. He reported the City had recently purchased software and had started recruitment efforts for the Geographic Information System (GIS) Analyst. Mr. McClendon reported that an additional $300,000 was allocated to the Transit Reserve Fund, bringing the total to $450,000. He explained that this fund is no longer needed because the new Transportation Fund will allow the City to continue the services this money was intended to support. He recommended that the money be saved in a General Fund Contingency Account for unexpected needs. - 5 - Councilmember Lieberman pointed out the fact that the reserve would be helpful should there be a drop in sales tax. Mayor Scruggs reported that the process of allocating transit funds back to the cities was beginning. She said the City's share had not as yet been determined, but it appeared that it would be approximately $100,000 per year. She pointed out the fact that Proposition 402 money would be reduced by the successful repeal of the food sales tax while, at the same time, the City is assimilating costs for current services paid by another tax that is going away. She said, at some point, they would need a General Fund infusion. She agreed that the money should be set aside. Mr. McClendon pointed out that funds in the Contingency Fund cannot be spent without Council authorization. Mr. McClendon continued his review of last year's Council goals. He stated that $50,000 was allocated for a Northwest Valley Traffic Study being done in conjunction with the City of Peoria. He said the Right-of-Way Enhancement and Beautification Program was increased by $200,000, with an additional $50,000 for ongoing maintenance. He stated that construction on the four beautification projects planned for this funding was scheduled for the spring of 2002. He said they provided one-time funding, totaling just over $1 million, for specific right-of-way and street improvement projects. He noted that the 75 ' Avenue and Bethany Home Road project had been completed. He reported receiving no bids on the 67th Avenue and Sweetwater project. He stated that it would be bundled with other projects and rebid. He said the four remaining projects were scheduled for construction in the spring of 2002. Mr. McClendon stated that $100,000 was set aside to purchase additional lots to continue the City's Habitat for Humanity partnership program. He noted that all of the funds were still available. Mayor Scruggs asked why four of the right-of-way enhancement projects require $50,000 in ongoing maintenance funds, while the remaining improvement projects only require $13,600. Mr. McClendon explained that the majority of the $50,000 was intended to increase maintenance efforts throughout the City's right-of-way areas. He offered to clarify how the money is allotted. He stated his belief that it was intended to accommodate increased costs in the existing schedule rather than to accelerate it. Mayor Scruggs said she recalled a discussion during last year's goal setting session wherein they wanted maintenance to occur more frequently. She questioned whether they could still afford an increased maintenance schedule. Mr. Reedy said his recollection of the discussion was that the Council wanted to provide the same level of maintenance throughout the City and felt an additional $50,000 would be needed to cover new growth areas. Mayor Scruggs expressed her opinion that those funds should be considered inflationary costs and be included in the base budget. Mr. Reedy agreed with Mayor Scruggs. Mr. McClendon continued his review. He stated that the Council had designated $1.3 million for 24 additional police officers and 8 civilian positions, most of which have been hired. He said the remaining $561 ,000 would be used to fill the remaining positions and - 6 - to purchase associated equipment. He stated that the Council allocated $277,500 in one-time money and $49,500 in ongoing funds for the ShotSpotter system. He noted that a contract to purchase had been issued. He said the $222,392 allocated to expand programs and services at the new Adult Center had been used to hire 3 new employees and to begin implementing new programs. Mr. McClendon discussed the City's economy. He noted that Arizona's employment growth represents a classic picture of an economic cycle curve. He said he expected accelerated growth rates in 2003/2004 and he had assumed this in the five-year forecast. He explained that Arizona's employment growth is a key indicator of how the economy is performing. Councilmember Clark asked if the 2002 employment numbers took into account the increase in const'uction employees needed for the construction of the new Coyotes arena. Mr. McClendon replied that the chart did not reflect that construction project specifically, but was based on the assumption that construction would be occurring throughout the state. Councilmember Clark asked Mr. McClendon if he had forecast Glendale's employment growth separately. Mr. McClendon stated they did not have the resources necessary to do a forecast for Glendale. He said, through the years, they have found that Glendale closely mirrors the Maricopa County employment and wage/salary growth trends. Councilmember Clark expressed her opinion that it is time that the City develop its own growth forecast. Mr. McClendon stated that they could explore that possibility. Councilmember Goulet agreed that there could be merit in specifically looking at Glendale. He ncted that business development was expected to shift to the West Valley. Mr. Beasley agreed that it would be prudent to separate Glendale and look at its employment growth trends. Councilmember L'eberman suggested that they contact Glendale Community College and Arizona State University (ASU) West to compile the City's growth statistics. Councilmember Clark stated that Elliott Pollack may already have the information. She explained that he was currently researching West Valley growth patterns. Mr. McClendon reviewed the General Fund City Sales Tax growth on a percentage basis. He pointed out that they were forecasting stronger growth to return in 2004/2005. He explained that it will be difficult to achieve the same percentage growth because the City's base has increased. Councilmember Clark asked Mr. McClendon about his projection for a 10% growth rate around the Coyotes arena development. She noted that there was a 20% growth rate in 1994 in the Arrowhead development area. Mr. McClendon explained that the sales tax rate increased in 1994. He pointed out that the revenues expected to come from the arena's surrounding development were pledged to that project and, therefore, they were not reflected in the General Fund's growth. - 7 - Mayor Scruggs asked Mr. McClendon if he could create a chart showing the effect of the food sales tax repeal on growth. Mr. McClendon stated he could. Mayor Scruggs explained that a chart would be helpful to have when the Council starts its process of determining where service cuts should be made. Mr. McClendon reviewed the General Fund City Sales Tax Dollar Growth chart. He pointed out that dollar growth in 2004 and 2005 is higher because of the increased base. Mayor Scruggs asked that this chart also be produced to show the effect of the food sales tax repeal. Mr. McClendon discussed the assumptions that were used in developing the forecast. He explained that inflation was assumed low. He noted that it had dropped each month in recent months, but was expected to increase gradually as the economy gets stronger. He sad they had assumed existing salary policies and used population growth numbers that were provided by the Planning Department. Mr. McClendon confirmed for Councilmember Clark that they were anticipating an 8% increase in population over the next five years. Mr. McClendon stated that they had assumed no additional staffing in Fiscal Year 2002- 2003. He explained that this was due to the recession. He said they went back to adding personnel to the Police Department each year in the remaining four years of the forecast period. He stated they were able to add the personnel required to operate the multi-generational facility which is scheduled to be built in 2003 and opened in 2004. He stated that they would also be able to add personnel to open a new fire station in 2005 and to open the West Branch Library as planned in the current Capital Plan. He noted that the projected demand in 2006 prevents them from doing more in earlier years. In response to Councilmember Clark's question, Mr. McClendon explained that the personnel needed to operate the new public safety facility were already in this year's budget and included in the base numbers. Mr. McClendon stated that they had planned in the payments required over the next three years for the Hickman Land purchase, the library, and police stations and the $100,000 one-time addition for tuition reimbursement. Mr. McClendon explained that, each year, they ask departments to identify their needs for the upcoming year and, each year, the department estimates exceed available resources. He reviewed where General Fund Revenues are derived. He noted that State-shared revenues and sales tax account for 44% and 40%, respectively. He said, in terms of sales tax, the percentage for construction had dropped from 11% to 9% since 1999. He reported that development fees had gradually declined since 1998. He stated, however, that he was projecting an increase in the second half of Fiscal Year - 8 - 2002. He pointed out that they had projected a possible increase in Community Development Fees in 2003. He explained that a recently completed cost study indicated that an increase was necessary to cover associated costs. Mayor Scruggs asked Mr. McClendon to reproduce the chart, eliminating the increased rates. Mr. McClendon stated that the potential increase totaled $500,000. Councilmember Lieberman said the decreased interest rate would spur construction in 2003, 2004 and 2005. Mr. McClendon agreed. He stated that they had forecasted a substantial increase in Fiscal Years 2004-05-06. Mr. McClendon reviewed the Primary Property Tax Summary. He pointed out the break that had been given to Glendale property owners. He stated that the City could essentially generate twice the amount being generated. Councilmember Martinez asked if there would be a Primary Property Tax decrease in the coming year. Mr. McClendon stated that there would be a decrease; however, because of a shift between Primary and Secondary rates, the overall rate would remain the same. He agreed that citizens often do not understand where the various pieces of their property taxes go. He noted that the City's Internet site contains a page that explains the breakdown. Mr. McClendon reviewed the projected annual surplus and deficit chart. He stated that, if the assumptions hold true, the future was indicative of a balanced scenario. He noted that the projection does not assume that the food sales tax or state-shared revenues will be eliminated. Mr. McClendon discussed potential scenarios that they had ran through their model. He explained that one scenario was the repeal of the sales tax on food, resulting in $4.7 million less in General Fund monies, $340,000 of which would be a reduction to the Public Safety Fund. He noted that the Transportation Fund would lose an additional $1.7 million. He stated that the second scenario considered the effects of House Bill 2006, a reduction of State-shared revenues. He said this scenario would result in a $321,000 reduction in revenue. In response to CoJncilmember Clark's question, Mr. McClendon explained that the City would start with a $4.7 million deficit if the food tax was repealed. Mr. McClendon confirmed for Mayor Scruggs that if the food sales tax was repealed, the City's forecasted hiring assumptions would not be possible unless another source of money was found. He explained that changes would have to be made to bring the deficit up to zero because the City is required to adopt a balanced budget. - 9 - Mayor Scruggs asked Mr. McClendon if he could prepare a list of City services and programs where cuts are not feasible. Mr. McClendon said this information would be brought to the Council. He pointed out that cuts in some areas might make reductions in other areas possible. Councilmember Clark identified basic services that the City has to provide, i.e. water, sewer, sanitation, police, and fire. She asked if the budget cuts would have any effect on those areas. Mr. McClendon explained that water, sewer, and sanitation are funded by user fees and would not realize any cuts. He stated that he did not envision any scenario which would cause the City to reduce basic police and fire services. He noted, however, that services not directly related to emergency services could be affected. In response to Vice Mayor Eggleston's request, Mr. McClendon explained that Capital Improvement Funds are monies used to build capital facilities, such as police stations, fire stations, park;;, streets, and so forth. He stated that they are one-time expenses. He said the Operating Budget includes recurring expenses incurred when providing City services. He stated that the General Fund exists to spend all revenues not designated for a specific purpose. He explained that the Council has the greatest flexibility with General Fund monies because they can be appropriated for any legal public purpose. He said monies in an Enterprise or Special Revenue fund are designated for a specific purpose and are tracked separately. Councilmember Martinez asked if deferring technology upgrades and equipment purchases could be considered as an alternative to reducing services. Mr. McClendon stated that, although it would be a viable solution for a one-time revenue loss, it would not be viable in the case of the food sales tax repeal as there would be less money every year. He said ongoing reductions would have to be made to make up the loss of ongoing revenue. Councilmember Goulet cautioned that delaying technology upgrades and equipment purchases could cost the City more in the long run. Mr. McClendon agreed that upgrading after falling behind the technology curve could be very costly. He noted that new technology is often a source of revenue savings by allowing manual processes to be automated. Mayor Scruggs referred to the hiring of 60 police officers and 18 firemen which was included in the forecasting assumptions. She expressed her opinion that the only way to hire those ind;viduals would be to reduce or eliminate other services in those departments that are not directly related to emergency response. She asked if the Police Chief and the Fire Chief could develop scenarios, outlining how non-emergency related services would be effected. Mr. David Dobrotka, Police Chief, cautioned the Council to proceed carefully with technology cuts. He stated that previous technology improvements have resulted in a dramatic increase in efficiency. He said every department will have to make cuts. He stated that they were prepared to provide suggestions on how best to do so in the Police Department. - 10 - Mr. McClendon said a shortfall in State-shared revenues would be easier to absorb because it would be a one-time reduction. He noted, however, that he was concerned it would set a precedence. Mr. McClendon said they were identifying potential program and service cuts, preparing dual budgets, and exploring revenue increase options in an effort to balance the budget. Mayor Scruggs said she was trying to understand if the food sales tax issue pertains specifically to taxes on food, or if it is part of a bigger issue having to do with the desire for lower taxes overall. She stated that she had discussed the issue at neighborhood meetings and the citizens had concluded that they did not want to lose services. She asked Mr. Flaaeri to look at the legalities of suggesting an alternative .01 percent increase on items other than food. Mr. McClendon said they had been working with departments and asked them to consider reducing programs or services that had a higher cost per person, were experiencing a decline in participation, or were duplicate services available from other entities. He stated that they were also asking departments for information about the impacts any reductions would have on citizens or other City departments using those services. Mr. McClendon said they would bring the dual track budgets back to the Council at the April 2002 budget hearings and, depending on the outcome of the General Election, the Council would adept the appropriate budget. Councilmember Lieberman asked to see more worst-case scenarios. He said there was no guarantee that the economy would improve in the near future. In response to a question posed by Councilmember Martinez, Mr. McClendon said they would have to make further reductions to Fiscal Year 2002-03 if the food sales tax was repealed and the State-shared revenues were reduced. Mr. McClendon reported on the Vehicle and Technology Replacement Funds. He reiterated that reductions or delays in this area only create a one-time savings. He said the vehicle replacement fund starts decreasing as replacements are scheduled. He said they did have some flexibility. He noted, for instance, that extending the life of each non-patrol vehicle by one year would generate ongoing savings of $145,000 per year. He said the balanced scenario was built on the assumption that this scenario was put into place. He stated that the Technology Replacement Fund does not have the same flexibility. He explained that delays in upgrading computers could result in their being unable to run current software. He said the fund also covers non-personal computer related Equipment, such as the telephone system. Mayor Scruggs emphasized the need for the Council to fully understand the impacts of cuts in certain areas, such as technology. Mr. McClendon agreed with Mayor Scruggs. - 11 - Councilmember Clark questioned if payment structures for non-personal computer related equipmert could be stretched. Mr. McClendon said he would bring that information back to the Council. Mr. McClendon stated that, at this point, they did not anticipate a need for any variation from what they had told the Council last June regarding the Enterprise Fund Rates. The meeting recessed for a short break. Mr. McClendon continued his presentation. He reviewed the Operating Budget Process Calendar. He said they would hold a special workshop session, and possibly a follow- up session, between now and the budget workshops scheduled in April of 2002. He said the Capital Improvement Plan (CIP) process will proceed concurrently with the Operating Budget process, with the CIP going to the Planning Commission in January and to the Counc I in February of 2002. He said, although the plan was basically the same, adjustments were made to certain costs. Mr. McClendon reviewed available one-time funding. He explained that one-time funding increases when revenues at the end of the preceding fiscal year exceed what was predicted and when expenditures come in below estimates. He stated that they had $4 million in unappropriated one-time funds at the present time; however, $2,464,223 has been committed for preliminary allocations, and contingency reserves are required as well, leaving a balance of $815,105. He estimated the revenue shortage for Fiscal Year 2001-02 to be $342,000. He expressed his opinion that the $815,000 in unappropriated funds should be set aside in case the economy performs more poorly than projected. Vice Mayor Eggleston asked what percentage of growth there was in sales taxes for September and October. Mr. McClendon said Glendale realized a 2% growth over September of 2000. He noted, however, that the percentage growth in previous years was much higher. He pointed out that the State-shared numbers for September were lower than last year. Mr. Beasley concluded by stating that the City had been given the opportunity to look at its budget in a different fashion. He acknowledged that there would be challenges. He said the City is in a better situation than some of its counterparts. He stated that staff would create an educational model for citizens to provide input as to where cuts should be made. He said they would bring back revenue options to the Council and discuss possible process adjustments. Councilmember Lieberman agreed that the $815,000 in unappropriated funds should be set aside. Mayor Scruggs voiced the agreement of all of the Council. ADJOURNMENT The meeting was adjourned at 10:45 a.m. - 12 -