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Councilmember Cook- Kallio thanked Mr. Culver for all he has done. She has enjoyed working him and wished him the best of luck. Vice -Mayor Thorne echoed her thanks. Councilmember McGovern said she appreciated how he has prepared the budget documents in a way that was easy for the public to read. She thanked him, and wished him luck as well. Councilmember Sullivan echoed comments, stating that Mr. Culver has been tasked with managing the City's finances through a very difficult time but he always felt comfortable with the information and recommended strategies presented. Assistant City Manager Bocian noted the Capital Improvement Plan actually looks at the next three years; however, only the first year is funded. The focus of this CIP is to ensure that the numbers are accurate with the least possible adjustment possible. He shared a slide outlining financial resources for the upcoming year, noting that the Streets amount shown is equal to 39% of revenue and Miscellaneous has decreased to 4.6% of revenue; the CIP is trending more towards an emphasis on Streets, Water, and Sewer programs over the next three years. He then shared a comparable slide on expenditures, which indicate similar changes and trends. Mr. Bocian reviewed recommended adjustments, including an increase in highway revenue resulting from Proposition 1 B; there was concern that this revenue source would be cut last year but it did pass with the State budget and has been included. He noted a significant reduction in development fees from a projected $3.5 million to $512,000 and referred the Council to page 49 of the CIP for other changes. He also noted that the CIP budget is based solely on revenues that have been secured and, therefore, even sizable decreases do not represent a significant change in planned projects. Mr. Fialho explained that from the mid -1990s through 2007 or 2008, the City transferred approximately $5 million annually into the CIP to fund a number of miscellaneous projects. The expenditure reduction in miscellaneous projects seen here is in part due to the fewer projects needed as the City reaches built out, and in part because that funding has been redirected to help balance the operating budget. Since this Council has been elected, those fund sources have been used to fund the Kottinger Restoration Project, Bernal Property, Alviso Adobe, Sports Complex, Veteran's Hall, downtown restrooms, and soon to be Firehouse Arts Center. He noted there are no projections for those sorts of funds in the CIP for at least the next three years, perhaps longer. Mr. Bocian discussed the five projects added to the CIP including: 1) Police Department solar improvement project funded primarily by grants, 2) Interactive Voice Response System, 3) Intersection improvements at Stoneridge Drive and Stoneridge Mall Road, 4) Intersection improvements at various locations, and 5) a reserve for Aquatic Center maintenance improvements. Mayor Hosterman inquired about the savings potentially realized from the solar installation project. Mr. Bocian could not confirm, but said it should be available upon full design of the project. Vice -Mayor Thorne inquired as to the total cost of the Aquatic Center improvements, and Mr. Bocian stated it is approximately $3.6 million. Mr. Bocian discussed amended projects, which have generally been adjusted only to reflect the revenue situation, as well as eliminated projects. He stated that staff undertakes a very detailed project process each year to evaluate all CIP projects. In addition, a reorganization of the City Council Minutes Page 7 of 11 June 15, 2010