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Councilmember Thorne thanked staff for their work on the budget, believed it reflects the value and wisdom of the City’s predecessors, and the tenacity of past and current staff to keep reserves funded and to maintain policies. He said the Governor has recommended the seizure of gas tax funds rather than trying to borrow them and the League is adamantly opposed to this and are fighting it. The Governor has removed the borrowing of Prop 1A funds, and this would wind up being $2 million over a 2 year period as opposed to the property tax funds which would have been about $4.7 million borrowed. He recommended placing a future item on Closed Session to discuss support of the League’s recommended actions. He believes borrowing funds is not right and the Governor’s proposal reflects this. Councilmember Sullivan agreed with staff’s proposed strategies, felt Pleasanton was better off than many other cities due to its reserves and if the economy does not improve over the next two years, the City will have to work even harder at maintaining its budget. He thanked staff for their salary freeze and concurred with monitoring the budget as the City moves forward. Mr. Fialho also wanted to highlight three major assets which were not covered and brought to the community; 1) the completion of the Alviso Adobe and its operations, 2) the soon to be Bernal property and associated costs of water, electricity and staffing, and 3) the Firehouse Arts Center. The City was able to complete these despite the $10-$12 million revenue reduction and he thanked all department managers who mutually gave up positions and cut non-personnel costs to achieve this objective. Vice Mayor Cook-Kallio also thanked Councilmember Thorne for being the City’s lead at the California League of Cities and speaking to legislators on behalf of Pleasanton. Resolution 09-305 MOTION: It was m/s by Thorne/Sullivan to adopt approving the 2009-10 and 2010-11 Operating Budgets and 2009-10 Community Development Block Grant Program. Motion passed by the following vote: Ayes: Councilmembers Sullivan, Thorne, Vice Mayor Cook-Kallio Noes: None Absent: Councilmember McGovern, Mayor Hosterman b. Consider approval of the Grants Working Group’s recommendation for future funding and processing changes to City Grant Programs including Community Development Block Grants (CDGB) Assistant City Manager Steve Bocian said the City Grant Programs and CDBG have implications in future years of the operating budget and staff believed that the discussion on the item was needed. He presented a PowerPoint presentation noting that in 2008 the Council formed an ad hoc working group whose purpose was to review processes for the City grant program and CDBG programs. The ad hoc group reviewed materials related both to the City grant and the CDBG processes in which three recommendations and findings were made. Mr. Bocian noted the committee wanted to explore the potential for an annual formula for the City grant program to make a determination as to whether that would help or hinder the program. The finding was that implementing a formula may benefit the program. The group determined that the total amount of funding for the City’s grant program exceeded what was seen with other survey cities, but that there continued to be a significant need. The recommendation is that the City grants formula increase, based on increases in the General Fund for the previous fiscal year. For year 09/10, it is at $190,000. If the previous year increased by 5%, the general amount to the program City Council Minutes Page 7 of 13 June 16, 2009