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risky assumptions associated with the Governor's budget proposal. As a result, the PUSD Board approved reductions to address the financial challenges in order to maintain the 3% reserve requirement. Based on Board action, the PUSD will be able to certify its financial status with positive certification on the Second Interim Report. The Budget Advisory Committee (BAC) Revenue Enhancement Subcommittee has been meeting and discussing the feasibility of a parcel tax. Ms. Cazares stated that an update regarding the state budget would be forthcoming in the May Revise. Dr. Casey did note that due to reductions some loss will incur to the service for students. Class Size Reduction has increased to 25:1 along with the loss of three instructional days. President Grant commented on the state mid -year reductions and the use of reserves. Overview of City Finances Nelson Fialho introduced Dave Culver, Finance Director, City of Pleasanton, who provided a mid -year budget update. He noted the current year budget, FY 2009 -10, is the first year of a two -year budget. This budget was originally adopted in June 2009 and the General Fund operating budget has been revised necessitated by the need to lower revenue estimates and make offsetting adjustments to expenditures and reserves to keep the General Fund budget in balance. The reduction in the original General Fund revenue estimates total $4,086,719. He noted that Sales Use taxes have decreased from their peak in FY 2006 -07 of almost $22 million to $15 million this year, or a total decrease of $7 million. Last year sales tax dropped 17% and this year it is expected to drop another 14.5 Hotel /Motel tax declined 17% last year and is expected to drop another 19% this year. Development fees (building permits, planning and inspection fees) have decreased from a high of $4 million two years ago to $1.3 million in the current year. Mr. Culver commented that Pleasanton has a reputation for being one of the most financially stable cities in California resulting from years of careful financial planning, definitive budget oversight, fiscally conservative Council direction and a diversified revenue base. As a result, Pleasanton is in a better financial position than most public agencies and private companies. He summarized the City of Pleasanton will likely face additional fiscal challenges in the future and that the next two year budget cycle will certainly be difficult for the City. If economic conditions worsen, the City will have the ability to adjust revenues and expenditures on quarterly basis to reflect unforeseen impacts. Vice Mayor Thorne mentioned the Liaison Committee will review HR 4812 Local Jobs for America Act community block grant formula which includes supporting teaching positions. REVIEW AND DISCUSSION OF POTENTIAL SHARED SERVICES Nelson Fialho commented on the possibility of sharing services between the City and PUSD to include street maintenance, public information, grounds maintenance, business services and human resources. He noted one target area initially will be the focus. Dr. Casey noted that discussion will continue regarding these services at the City Liaison meetings. President Grant commented in advance of the next Liaison meeting, staff and management could work on how we could apply for utilization to make the grant work. Mayor Hosterman noted that collaboration is already in place regarding the School Resource Officers (SRO). President Grant added the DARE program, traffic safety, crossing guards, career coaching, YIG, and joint use of facilities are other areas as well and both the City and District collaborate daily and solve issues as they arise. Mayor Hosterman further commented that while the State of California falls short of funding for education, PUSD has maintained its status of being one of the top ten within the entire State of California. Community partnership and families who make education a top priority make the City of Pleasanton a great place to live and do business. She noted that the staff from both the City and PUSD are operating on far less. City Council School District Page 3 of 4 March 22, 2010 Joint Meeting Minutes