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To meet the City budgetary principles, staff and the City Council have focused on five key budget areas as follows: • Establishment of a soft hiring freeze • Pursuing revenue enhancements when appropriate . Labor concessions • An organizational wide program and service level assessment to determine operating efficiencies and potential opportunities for reducing operating and capital costs . Maintenance of the City's fiscal policies as appropriate to meet current financial conditions Carrying out these budgetary actions has been successful in addressing the City's financial issues to date and have helped control personnel related costs. Controlling personnel costs has been critical since 79% of the City's General Fund budget is used for personnel costs including employee benefits. As can be imagined, the combination of reducing personnel related costs, while at the same time continuing to meet increasing service demands (such as programming and maintaining the newly opened Fire House Arts Center, Bernal Community Park, and Alviso Adobe Interpretive Center), requires cooperation from all City employees and fortunately, to date, this cooperation has been achieved. To remain successful as an organization, it will also be necessary for city management and employees to continue working cooperatively to obtain additional cost savings to assure that the City retains the financial means required to maintain service levels that meet community needs and expectations into the foreseeable future. We are confident that this long standing approach and the City's cautious fiscal planning will continue through these challenging financial times. Below is an outline of the personnel cost savings and containment approaches that have been pursued and the justifications for these actions. As further described below, this effort has focused on the following four - pronged approach: • Soft hiring freeze • Controlling salary increases . Modification to employee rnedical /health care benefits (including post - employment medical) . Adjustments to CaIPERS employee contributions Notwithstanding the recessionary pressures facing the City of Pleasanton, it is important to note that in spite of these difficult times, the City remains on firm financial ground. Core services are provided at a high level, the workforce remains strong and motivated, capital improvement projects related to essential public safety needs (e.g. interoperability communication and utility upgrades) and necessary facility improvements remain funded, equipment replacements and park renovations are occurring consistent with prioritized needs, and the City has been able to maintain and add to its various General Fund reserves that are available in the event of an even more severe economic downturn. The City currently has general fund reserves of approximately $25.9 million; in addition the City has restricted or capital reserves of Page 3 of 9