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December 2, 1982 <br />Page 2 <br />Due to the likely end of or significant reduction in the Revenue <br />Sharing program an option would be to purchase budgeted Revenue <br />Sharing items regardless of the possibility of reductions in State <br />Aids. Equipment purchased with Revenue Sharing funds budgeted for <br />1983 will result in the City having, as a whole, equipment in good <br />condition. Having the present equipment in good condition would <br />allow a year or perhaps two to begin setting aside General Fund <br />money for future replacement of equipment. This option also advocates <br />the policy that current General Fund expenditures should be financed <br />solely from current General Fund revenues. This option further <br />advocates the policy that any temporary transfer of other funds to <br />the General Fund to offset revenue shortfalls is only a temporary <br />solution. The problem may be a continuing one and may be faced <br />again in the next fiscal year. <br />The option of a transfer of money from the Revenue Sharing Fund <br />to the General Fund to offset •revenue shortfalls is viable only if <br />the problem faced is of a temporary nature and will not occur again <br />in future fiscal periods. If the problem does affect future fiscal <br />periods a transfer from other funds is only a "band aid" approach. <br />It would be much better financial management to face the problem <br />now and resolve it. <br />Of the two options regarding use of Revenue Sharing funds, staff <br />would recommend using Revenue Sharing funds to finance current <br />General Fund operations only after all other options to adjust for <br />a possible revenue shortfall were exhausted and as a last resort. <br />The recommendation to defer the purchase of the dump truck and <br />mention of the possibility of the use of Revenue Sharing funds was <br />made only so that that option would be available to the Council. <br />Should the Council adopt the policy that the General Fund's operations <br />be financed solely from General Fund revenue sources, without <br />reliance upon other revenue sources, then staff would recommend <br />that the dump truck, as well as 1983 budgeted revenue sharing items, <br />be purchased. This would allow some time for the City to begin <br />setting aside money for replacement of equipment used in General <br />Fund operations. Staff requests Council's direction in this matter. <br />DB/ds <br />