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BACKGROUND The City of Pleasanton prepares a biennial operating budget which, in this case, covers the period including 2009 -10 and 2010 -11 fiscal years. The operating budget section updates the 2010 -11 year. The City of Pleasanton also prepares a four year Capital Improvement Program which, in this case, covers the period from 2009 -10 through 2012 -2013. Section II updates the Capital Improvement Program in the 2010 -2011 year only. DISCUSSION The operating budget update includes adjustments to a number of funds including the General Fund, Enterprise Funds, Internal Service Funds, and Special Revenue Funds. Adjustments to all funds reflect updated projections involving projected interest income, contributions to the replacement plan, adjustments to inter -fund charges and updated personnel cost estimates. In addition, General Fund adjustments reflect updated revenue projections taking into account current economic conditions including recommendations that maintain a balanced budget and current service levels. The Mid -Term Capital Improvement Program includes five new projects, five currently funded projects that have been amended to reflect changes in scope or funding requirements and three projects that were funded previously but are included as part of the current CIP. As a result of these adjustments, CIP expenditures are recommended at $20,228,903 which represents a decrease of $3,462,464 (14.7 less than the $23,691,367 included in the current CIP. Total Financial Resources Available for all three years remaining in the CIP is estimated at $34,093,039 which represents an increase of $6,721,165 (24.4 from the $27,451,874 included in the current CIP. However, this increase is based primarily on the receipt of future projected development revenues which are contingent upon the overall state of the economy and the building industry and as a result, they may not materialize. In addition, a significant portion of these fees, $1.7 million are projected to be received in the final year of the CIP but will not be available for programming until FY 2013 -14. As a result, a more accurate indicator is the increase of $1.5 million occurring in FY 2010 -11 which does reflect actual revenues available, assuming no significant adjustments by the State for streets related revenues. As indicated in the CIP narrative, this increase results from larger than expected fund balances, increase transfers from the Water and Maintenance Fund to the Water CIP and increased roadway maintenance funds. In addition to the analysis included in the CIP Narrative section, the Mid -Term update also includes summary and detailed financial tables and project description sheets for new projects. Submitted by: Approv by: 1 1 David P. Culver Nelson Fialho Director of Finance City Manager Page 2 of 2