07-10-07 FPAC Agenda - Laserfiche WebLink

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General Fund Reserves Use Policy Resolution#34722 III . Basic revenue growth falls to below 5.5 percent for two(2)consecutive quarters or the Financial Forecast estimates basic revenue growth will be below 5.5 percent for the next fiscal year.Basic Revenue is defined as the sum of General Fund property tax,business license,utility license/franchise fees,cigarette and liquor taxes, transient lodging taxes, and interest income. In addition,one or more of the following conditions must occur in conjunction with slower basic revenue growth: s The Portland Metropolitan Area(PMSA)unemployment rate is reported above 6.5 percent for two(2) consecutive quarters or the Financial Forecast estimates PMSA unemployment will average in excess of 6.5 percent for the next fiscal year. + The property tax delinquency rate exceeds 8 percent. Business license year-to-year revenue growth falls below 5.5 percent for two(2)consecutive quarters or the Financial Forecast estimates Business License revenue growth at less than 5.5 percent for the next fiscal year. Exhibit A summarizes these indicators on an annual fiscal year basis for the period FY 1969-70 through FY 1998-99. Exhibit A shows that basic revenue growth below 5.5 percent occurred three times in the past two decades. Exhibit A should not be construed to suggest that use of reserves would avoid the need to reduce expenditure growth or possibly the absolute level of expenditures over a multi-year period. Declines in Bureau specific cost recovery revenues, contract income,or service reimbursement income may not be offset by transfer of counter cyclical reserve resources. The Council should begin to restore Counter cyclical Reserves used under the guidelines with 24 months after their first use. Table 2: Counter Cyclical Reserve Use Indicators • City of Portland-History of Counter Cyclical Reserve Use Indicators PMSA Unemployment Property Tax Delinquency Basic Revenues Rate Rate Business License Revenue Fiscal Growth Growth Year (%) Below 5.5% Rate(%) Over 6.5% Rate(%) Over 8.0% (%) Below 5.0% 1971 4.9% Below 5.5% 7.6% Over 6.5% 8.2% Over 8.0% 0.6% Below 5.0% 1972 9.1% NA 6.9% Over 6.5% 7.1% NA 5.4% Below 5.0% 1973 9.3% NA 5.6% NA 6.8% NA 14.9% NA 1974 7.0% NA 5.8% NA 12.2% Over 8.0% 33.4% NA 1975 4.9% Below 5.5% 7.8% Over 6.5% 10.7% Over 8.0% -11.9% Below 5.0% 1976 13.6% NA 9.6% Over 6.5% 9.7% Over 8.0% 24.8% NA 1977 8.5% NA 7.7% Over 6.5% 8.6% Over 8.0% 42.9% NA 1978 7.1% NA 5.7% NA 8.9% Over 8.0% 10.9% NA 1979 10.6% NA 5.3% NA 7.9% NA 19.4% NA 1980 7.1% NA 5.7% NA 11.7% Over 8.0% 5.3% Below 5.0% 1981 10.6% NA 7.1% Over 6.5% 5.9% NA 4.8% Below 5.0% 1982 2.3% Below 5.5% 9.1% Over 6.5% 6.7% Over 8.0% -10.9% Below 5.0% 1983 -0.1% Below 5.5% 10.4% Over 6.5% 8.6% Over 8.0% -0.8% Below 5.0% • City of Portland,Oregon-FY 1999-00 Adopted Budget 295