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Discussion Regarding Assumptions for the Long Range Financial Projection
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The purpose of this item is to discuss and re-examine the assumptions in the current Long Range Financial Projection (LRFP).
During the Fiscal Year (FY) 2024 budget hearings, Council considered and unanimously approved the budget and the LRFP. In addition, Council also directed staff to "...return with a proposed ordinance for Council consideration to increase the County's Gross Receipts Tax (GRT) rate by 0.5%, with 2 options, effective either Jan 1, 2024, or July 1, 2024." However, during the hearings to enact one of the GRT options, neither option was enacted. Having no new GRT option enacted contradicts the previous assumptions in the LRFP. In order for staff to operate effectively over the next year in accordance with our financial plan, this discussion is to examine this contradiction and all assumptions in the LRFP, with the goal of eventually having Council approved amended assumptions at a future meeting.
The FY 2024 Adopted LRFP assumptions are included as Attachment A. Since there are a large number of potential variables, staff is suggesting that for purposes of this discussion, the focus be on 3 areas:
1. Assumptions regarding future GRT revenue;
2. assumptions regarding new GRT increment; and
3. assumptions regarding expenditures.
For each of these areas, the current assumptions will be discussed, potential alternative assumptions will be outlined, and possible alternative financial outlooks associated with each potential alternative assumption will be demonstrated.
1. Future GRT Revenue
a. Current Assumptions - FY2024, +5%; FY2025, +5%; FY2026, +3%; FY2027, -10%; FY2028, -5%; FY2029, 0%; and then + 3% per year thereafter. The 15% decrease currently projected in FYs 2027 and 2028 was one of the factors driving a proposed new GRT.
b. Potential Alternative Assumptions
i. Replace the -10% and -5% in FYs 2027 and.2028 with 0% (Attachment D)
ii. Other...
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