On May 26, 2020, the City Council adopted a “status quo” budget for FY21, knowing that effects of the COVID-19 pandemic event would reduce revenue and make the budget nearly impossible to achieve as written. At present, the effects of the pandemic event are anticipated to be most acute with respect to the city’s consolidated tax (“C-Tax”) revenue. C-Tax  and Fair Share revenue comprises 42% of the city’s General Fund, roughly $33.9M of $81.9M in projected annual revenue. Less than half of the city’s budgeted expenditures are supported by the General Fund revenue ($79.4M of $222.5M across all funds) but a substantial decrease in C-Tax, coupled with companion decreases in property tax and revenue generated by licenses and permits, will hamper the city’s ability to implement the FY21 Budget as adopted.

The city’s five-year (2018-2023) Strategic Plan is designed to assure fiscal stability and an effective work environment so city employees can serve a safe community by delivering cost-effective and sustainable services, supporting opportunities for economic development, and creating opportunities for civic engagement. The Plan would achieve these goals through six primary areas of focus:

• Managing growth by focusing on infill development and protecting open spaces and parks.
• Supporting connectivity in transportation and communications systems.
• Delivering quality community facilities and services that maintain the safety and well-being of the public.
• Increasing citizen participation in development of policies that reflect the wants and needs of the community.
• Ensuring the city’s ability to overcome disruptive change while preserving or rebuilding environmental, social, and economic health.
• Assuring availability of housing solutions for all economic conditions, supporting economic growth in the community with an eye to financial sustainability.

As part of the Strategic Plan, the city also identified 26 “core services” that run the gamut from Patrol and Detectives to Capital Projects and Pavement Management to the Alf Sorensen Community Center and Special Events. But where the Strategic Plan reflects the needs of the community and the priorities of the City Council, the list of core services is just a collection of tools available to achieve those goals without any defined order of implementation. In order to better target FY21 Budget adjustments made necessary by falling revenues, the city’s senior leadership team organized the core services into four “functional areas”: Public Safety, Infrastructure and Facilities, Quality of Life, and Administration. The FY21 Budget was pulled apart for total monetary commitment (program by program, fund by fund) to each functional area in order to better understand how impacts to a particular core service might affect the city’s ability to achieve the goals laid out in the Strategic Plan.

As our community grows, there are increased demands for services and desires for new programs and initiatives, even in times of declining revenue. Balancing the six Strategic Plan goals allows continued delivery of the quality services our residents and businesses deserve and expect from their local government. Although more severe circumstances could require commensurately severe adjustments, such balance cannot be achieved in the immediate case by the wholesale elimination of tools or services. Instead, a measured approach to scaling city operations is required to maintain the “bundle” of functional areas that make Sparks a city where people choose to live, work, and play. The complete bundle is important; Public Safety, Infrastructure and Facilities, and Administration all beget Quality of Life – the ultimate Strategic Plan goal. The functional areas, their core services, and funding levels for each are as follows:

Public Safety ($57.4M General Fund, $100.4M all funds)

• Building and Safety ($141k General Fund, $4M all funds)
• City Attorney – Criminal Division ($779k General Fund only)
• Dispatch ($2.7M General Fund only)
• Fire/EMS ($18.9M General Fund only)
• Fire Prevention ($1.2M General Fund, $1.7M all funds)
• Municipal Court ($2.5M General Fund, $3.6M all funds)
• Police ($31M General Fund only)
• Signal Maintenance ($383k General Fund only)
• Wastewater Treatment ($0 General Fund, $37.5M all funds)

Infrastructure and Facilities ($2.2M General Fund, $71.2M all funds)

• Capital Projects ($473k General Fund, $8.7M all funds)
• Facility Maintenance ($1.3M General Fund only)
• Pavement Management ($487k General Fund, $6.9M all funds)
• Utility Maintenance ($0 General Fund, $45.9M all funds)
• Vehicle Maintenance and Replacement ($0 General Fund, $8.4M all funds)

Administration ($13.4M General Fund, $31.1M all funds)

• City Attorney – Civil Division ($1.1M General Fund only)
• City Clerk ($550k General Fund only)
• Customer Service ($351k General Fund)
• Debt Service ($0 General Fund, $482k all funds)
• Emergency Management ($19k General Fund only)
• Finance ($2.7M General Fund only)
• General Administration ($4.7M General Fund only)
• Human Resources ($1.5M General Fund only)
• Information Technology ($2M General Fund only)
• Public Relations ($453k General Fund only)
• Self Insurance - Benefits ($0 General Fund, $15.8M all funds)
• Self Insurance - General Liability ($0 General Fund, $1.4M all funds)

Quality of Life ($6.3M General Fund, $19.8M all funds)

• Advanced Planning ($475k General Fund only)
• Code Enforcement ($428k General Fund only)
• Community Appearance ($1.0M General Fund only)
• Community Centers and Programs ($0 General Fund, $2.3M all funds)
• Community Development Block Grant($0 General Fund, $734k all funds)
• Current Planning ($0 General Fund, $2.5M all funds)
• Mayor and City Council ($642k General Fund only)
• Parks Maintenance ($3.8M General Fund only)
• Redevelopment ($0 General Fund, $5M all funds)
• Special Events ($0 General Fund, $842k all funds)
• Sports Complexes and Programs ($0 General Fund. $514k all funds)
• Tourism and Marketing ($0 General Fund, $111k all funds)
• Youthwatch ($0 General Fund, $1.5M all funds)

The proverbial legs supporting Quality of Life are uneven, but not discordant. Each functional area works in concert with the others and none is independently prioritized in the FY21 Budget. So called “across the board” cuts will not impact each functional area or core service in the same way, so evaluating adjustments by focusing on second and third order effects on the organization and implementing adjustments in a way that does not wholly abrogate the efficacy of the core services and functional areas is integral to the success of the Strategic Plan, even in uncharted fiscal territory. This is particularly true now, when the most significant impacts are anticipated to the General Fund.

Any municipal budget inherently reflects the ambitions and desires of a community, and the evaluative framework described herein was designed to assist in understanding the ways and places where budgetary changes are more (or less) impactful with respect to the adopted Strategic Plan. Using it as a lens through which to view fiscal adjustments due to anticipated declines in revenue will help preserve the foundational services provided by the city.

1. Council may accept the evaluative framework as recommended by the City Manager.
2. Council may adjust or reject the evaluative framework and provide further direction to the City Manager.

I move to accept the evaluative framework categorizing the core services identified in the staff report into the functional areas of Public Safety, Infrastructure and Facilities, Administration and Quality of Life as recommended by the City Manager for the purpose of guiding any budgetary adjustments that may be necessary in FY21.