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presented for approval tonight as the baseline. He said staff will be updating it every 2 years and will present a 10-year future look, or a long-term picture. Councilmember Sullivan questioned the golf course revenue being brought in annually, and Dave Iremonger reported staff had originally projected about 58,000 rounds for the first half and full year, which was amended to 68,000 rounds and now it looks like they were projecting 72,000 to 73,000 rounds ending June 30th. Originally they had approximately $300,000 of projected net income which was increased to $700,000 and it looks now they will be over $900,000 in net income for this year. All expenses have been covered for operating the golf course, debt service is paid at $1.6 million for construction of the course, and the $900,000 was well above where they projected to pay this year's contribution to debt service. Councilmember Thorne questioned if staff used zero based budgeting or used historical actuals as a base. Mr. Culver said they use historical actuals as a base line budget, look at increment being requested above that, identify unavoidable increases versus what would be nice to have, and generally they maintain status quo services they are offering now, unless it is an enhancement, which is brought to the Council. Councilmember Thorne questioned why then was the City always over budget, as he was having difficulty in using this concept of using budgets and expense reports as a management tool and said there is always an unstated number. Mr. Culver said on the revenue side, it was difficult to predict due to estimates, triple flip numbers, and some employee vacancy savings. Councilmember Thorne felt if staff intends to have money left over at the end of the year, he suggested there be a special line item for contingencies that accounts for the under spending at the end of the year. Councilmember Cook-Kallio referred to the state being able to come in twice in 10 years and take a loan, asked if they had done this in Pleasanton, asked whether they did this in solvent cities and felt it was almost a penalty for being good at what the city does. Mr. Fialho said two years ago the State passed Proposition 1 A that limits the amount of times the State can borrow from local jurisdictions to balance their budget. They can only do that two times every ten years. He said the last time he saw the numbers, since 1992 which was where he saw the state balance its budget on the backs of counties and cities, the City of Pleasanton has lost approximately $50 million to the state. This money has been taken out of Pleasanton's sales and property taxes annually to balance its budget, and Mayor Hosterman noted the State must pay it off within three years before they can take a second loan. Councilmember Sullivan said what concerns him is the state still has a deficit and they are still using the same gimmicks to balance the budget in years past. Mr. Fialho said Councilmember Thorne's comments have been heard, they have not been discounted, the difficulty the City has is that they must rely on many of the revenue projections from other agencies and sometimes they are low and it is revised. Property tax payments occur twice annually whereas sales tax comes in four times annually. TOT was largely dependent on the economy which was also hard to predict. However, he would rather be in the current position than the opposite. Councilmember Thorne asked if any federal earmark monies were received from Washington for three projects, and City Manager Fialho said these were not accounted for, requests were still in, they asked for those grant sources last year but the federal earmark process was put on hold or "imploded° and Councilmember Cook-Kallio was going to Washington next week on a separate trip and she was hoping to be doing some official City business on where we are in the process. City Council Minutes 10 June 19, 2007