1. December 2, 2008 City of Glendale - Finance Department 1 First Quarter Financial Update December 2, 2008

2. City of Glendale - Finance Department 2 General Fund - Overview Revenue & Appropriations Revenue is tracking at 13.1% of the original estimates (vs. 16.9% @ 9/30/07) Expenditures are tracking at 23.9% of the original estimates (vs. 26.4% @ 9/30/07)

3. December 2, 2008 City of Glendale - Finance Department 3 Surplus/ Surplus/ Revenues Expenditures (Shortfall) Revenues Expenditures (Shortfall) Submitted Budget$164,569,000 $174,537,206 ($9,968,206) Revised Revenues 2,073,372 2,073,372 Revised Revenues 2,073,372 2,073,372 Department Reductions (5,905,327) 5,905,327 Department Reductions (5,905,327) 5,905,327 Other Vacancy Reductions (754,041) 754,041 Other Vacancy Reductions (754,041) 754,041 Changes in Transfers 1,517,000 (650,000) 2,167,000 Changes in Transfers 1,517,000 (650,000) 2,167,000 Citywide Reductions (432,000) 432,000 Citywide Reductions (432,000) 432,000 Unavoidable Expenses 1,316,041 (1,316,041) Unavoidable Expenses 1,316,041 (1,316,041) Adopted Budget $168,159,372 $168,111,879 $ 47,493 General Fund - Overview 2008-09 Budget Balancing Recap

4. December 2, 2008 City of Glendale - Finance Department 4 General Fund - Overview Revenue & Appropriations Revised Revenue Projections: Sales Tax$(3,032,000) Occupancy Tax (100,000) Other Taxes (300,000) Licenses & Permits (1,620,000) Motor Vehicle in Lieu (600,000) Charges for Services (1,249,755) Intergovernmental Revenues (25,000) Fines & Forfeitures (340,000) Use of Money & Property (868,444) $(8,135,199)

5. December 2, 2008 City of Glendale - Finance Department 5 General Fund - Overview Revenue & Appropriations For some major revenue sources, additional time and data are needed in order to draw conclusions First property tax payment due late December Holiday sales tax revenue results will be known in April 2009  For the last two fiscal years, holiday sales in the 4 th quarter represent 32% of annual retail sales

6. December 2, 2008 City of Glendale - Finance Department 6 General Fund - Overview Revenue & Appropriations General Fund departmental expenditures are 23.9% for the first 3 months Fire Department expenditures are at 26.8% due to costs incurred for brush fire strike teams; costs to be reimbursed Appropriation request of $20,000 to purchase office trailer, that will be reimbursed by GUSD. This will result in net savings due to termination of rental payments

7. December 2, 2008 City of Glendale - Finance Department 7 General Fund Budget FY 2008-09 Adopted General Fund Revenues$168,159,372 LESS: Sum of Revised Revenue Projections (8,135,199) Sum of Revised Revenue Projections (8,135,199) Revised General Fund Revenues$160,024,173 ADD: Proposed 1 st Quarter Adjustment20,000 Proposed 1 st Quarter Adjustment20,000 Adjusted General Fund Revenues$160,044,173 Study Session in early January to discuss budget balancing strategies.

8. December 2, 2008 City of Glendale - Finance Department 8 Highlights of Adjustments to other funds Special Revenue Funds $322,100 for Police Redflex contract for red light traffic enforcement; revenue offset Various Police and Fire grant clean-up; revenue increase of $957,401, and decrease in appropriations of $1,306,139 Capital Improvement Fund $20,673 for Police vehicle mounted video system Transfer of $98,000 to reimburse software replacement fund for CSI Fire project

9. December 2, 2008 City of Glendale - Finance Department 9 Highlights of Adjustments to other funds Enterprise Funds Appropriation of $690,000 in the Sewer Fund for the contract increase with the Hyperion Amalgamated Sewer System Internal Service Funds $87,759 reduction in appropriation for fire equipment lease. Transfer in of $98,000 software fund for CSI Fire Project

10. December 2, 2008 City of Glendale - Finance Department 10 PERS Rates PERS rates slightly decreased for next year The 15 year rate stabilization plan has effectively limited uncertainty PERS investment losses in the stock market could translate (worst case scenario) to a 2-4% increase in rates beyond FY 2009-10 Actual FYActual FY 2008-09 2009-10 2008-09 2009-10 Safety 3% @ 5024.252%24.000% Safety 3% @ 5024.252%24.000% Misc. 2.5% @ 5511.681%11.519%

11. December 2, 2008 City of Glendale - Finance Department 11 Economic Outlook State of California Budget Crisis Sub-prime Mortgage Collapse Credit/Banking Crunch Stock Market Slide Low consumer confidence Unemployment Increasing From 5.4% in October 2007 to 8.0% October 2008

12. December 2, 2008 City of Glendale - Finance Department 12 Economic Outlook California budget crisis continues…. Governor called for special session $11.2 billion budget deficit caused by revenue drop $16+ billion budget gap projected for 2009/10 Additional Impact to Glendale unknown

13. December 2, 2008 City of Glendale - Finance Department 13 Glendale's Fiscal Position Glendale’s Fiscal Condition relative to Others 2 nd Qtr Sales Tax down 0.1% vs. County Avg. (2.6%) Stable property tax base  4% increase in Assessed Valuation  Less than 1% in foreclosure Broad retail base; addition of Americana, but loss of Mervyns and others Reduction in construction related revenues

14. December 2, 2008 City of Glendale - Finance Department 14 Next Steps….. Continue efforts in the following areas: Closely follow the economy and impacts to Glendale Control spending; evaluate and implement cost reduction strategies Continue to develop and propose new revenue sources Monitor State proposals that have impacts on Glendale; be prepared to address through various means

15. December 2, 2008 City of Glendale - Finance Department 15 Recommendations Present alternative budget balancing strategies to Council in a study session in early January 2009 Report to the City Council on Mid-Year Budget Conditions in February Council accept the 1 st Qtr financial report and approve the adjustments as proposed