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There are additional related reports on tonight's agenda which the City Council will also <br /> consider including concerning introduction of a resolution concerning a tentative <br /> agreement memorandum of understanding with the Pleasanton City Employee <br /> Association/ AFSCME Local 955 (PCEA/AFSCME) and an amendment to the <br /> Management and Confidential Compensation and Benefits Plan. This report also <br /> incorporates certain exhibits including a City 3 -Year budget forecast (Exhibit D) and a <br /> regional white paper that addresses the need for specific pension reform throughout <br /> local government (Exhibit E). <br /> RECOMMENDATION <br /> This is an informational report; no action is required. <br /> FINANCIAL STATEMENT <br /> There is no financial impact as a result of this report. <br /> BACKGROUND <br /> Recently, the City has experienced revenue reductions from a broad range of revenue <br /> sources, while at the same time it has faced escalating costs. As an example of <br /> revenue reduction, General Fund revenue, which was $94 million in the 2007 /08FY, <br /> was $85.2 million in the 2009/10FY. In response to these reductions, General Fund <br /> expenditures and transfers have been reduced from $94 million in the 2007/08FY to <br /> $84.8 as reflected in the adopted 2010/11 FY Mid -Term Budget. While expenditure <br /> reductions have been significant, they are accentuated by the fact that each of today's <br /> dollars is buying less due to inflationary pressures for items such as fuel, gas and <br /> electricity, medical costs, general supplies, vehicles and contract services. In addition, <br /> as discussed in detail later, cost increases are being experienced stemming from the <br /> California Public Employees Retirement System (CaIPERS). <br /> To address these revenue reductions and cost increases, the City has focused on <br /> meeting the City Council's annual priorities, which have proven to be beneficial for <br /> making decisions regarding resource allocations, and on adhering to the following <br /> budget principles: <br /> . meet essential public safety needs fully <br /> . maintain core service levels by maximizing available personnel and financial <br /> resources <br /> . incorporate innovation to meet all service levels and minimize ongoing expenses <br /> . pursue cost recovery strategies <br /> . preserve the City's fiscal policies including those related to maintaining General <br /> Fund reserves. <br /> Page 2 of 9 <br />