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Nelson Fialho, City Manager, gave an overview of the City's finances. They adopted their two year operating budget almost two years ago and they adjust their budget quarterly. They have adjusted their budget down by $10M from what was projected two years ago. The City has had insight into establishing a fiscal policy that has provided a surplus to meet ongoing future obligations. The City has a very aggressive replacement plan. They do not build one -time expenses into their budget. As bad times roll in, as they are now, they reduce those contributions into their replacement plans. When good times occur they pre fund, thus allowing them to adjust their budget over a period of time. General revenue is experiencing a reduction due to the local economy. Sales tax, property tax revenue, hotel tax revenue, business license tax sources are all affected. Market values have decreased in Pleasanton. People are spending less. Hotels are asking to defer their tax payments for the first time. Fewer permits were issued. The budget was adjusted downward by $9.4M. The City has deferred replacement of equipment, they are holding on some vacancies, and have asked departments to reduce costs. The State continues to adjust revenue assumptions; it is unknown if the State will borrow revenue from cities and counties by declaring a fiscal emergency. If that is done, that is another $4M annually that the City will have to do without. Over the years, the City has lost about $100M in ERAF and the school district has not received that amount. David Culver, Finance Director, gave an abbreviated overview of the City's adopted budget. He highlighted areas of their operating budget, the expenditures, and sources of revenue. He noted the major adjustments and revisions made to their budget. Approximately 90% of their operating budget comes from taxes and user fees. 6. OVERVIEW OF JOINT CITY DISTRICT PROJECTS, PROGRAMS AND SERVICES The City and the School District have worked collaboratively on a number of facilities and programs for the benefit of the two agencies and the community. Nelson Fialho, City Manager, said that the City- District Liaison committee has been meeting monthly and talking about efficiencies and combining services. Dr. Casey and Mr. Fialho are working with their staffs to identify possible additional opportunities to jointly manage. Some of the programs we share are: the three gyms throughout the city; the Donlon field; joint -use of parks /school sites; after school recreation programs; middle school dances; the DARE program; the school resource officer program; fuel procurement and storage; parking lot lights; the library Bookleggers Program; Paws to Read; and shared catalog and free delivery of pubic library books to schools. In addition, the City and School District have worked jointly on grant projects. Dr. Casey highlighted some other projects: the lighted tennis courts at Pleasanton Middle School; the Every 15 Minutes Program; and crossing guards. The City and School District have worked cooperatively on training to maintain pools and aquatic problems and on getting the Donlon field up and running. Other ideas coming forth for consideration are: pressure washing, boom lift, and carpet cleaning machine usage. The Rides to School program is another partnership that encourages walking, carpooling, or riding bikes to school. 7. 2009 CITY SCHOOL DISTRICT LIAISON COMMITTEE FOCUS AREAS The City of Pleasanton and the Pleasanton Unified School District Liaison Committee annually establishes focus areas to guide its efforts for the year. The five focus areas recommended for the City Council and the Board of Trustees to approve are: Youth Services; School Community Safety; Transportation; Character Education; Operations, Programs and Budgets. City Council Minutes Page 3 of 4 March 23, 2009