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have indicated long term contracts are extremely beneficial to create stability. In these uncertain times, we have to be able to quickly deal with issues as they arise. To wait until the November election or until the state adopts a new budget in August 2003 and then start negotiations with the employees group for a contract that expires in November 2003, is folly. It is prudent and fiscally responsible to take this action now, especially compared with what is happening in the private sector. He acknowledged there are people in town who have lost their jobs and whose stock options have not been as fruitful as they would like. He realized that bubble has burst. The City of Pleasanton has a very stable growing property base, sales tax base, diversification of business in the community, such as telecommunications, biotechnology, etc. There is strength here and if one industry goes down, another will go up. He reminded people that Applied Biosystems is building a million square foot project in Pleasanton and PeopleSofi is adding on as well. He did not think the city was so desperate that it could not treat its employees fairly. He believed Council has always tried to treat the employees fairly. High standards of excellence are expected of them and he believed they expected to be compensated fairly. He is happy the City is able to do that and at a cost that is minimal compared to the private sector and the Social Security system. Just because PERS is so successful, we as a city should not deny the employees the opportunity to participate in that successful program. Ms. Michelotti said there were seven closed sessions on this. Before Ms. McKeehan and Nelson Fialho went to negotiations, Council gave them parameters. There was a vote of the employees and now the contract is before Council for ratification. She believed the City Manager and Finance Director are very fiscally conservative. Ms. Michelotti said she has been on Council for eight years and they have not led the Council or the City astray in any way. She felt Council should rely on the experts in the field. It is tree that in closed sessions there have been debates on these issues. She said she has been involved with the City for over twenty years and she has found the city employees to be dedicated and hard working. When times were tough, the employees accepted a zero percent increase. People talk about the past boom in the economy, but there was a time when things were not so good and the employees responded and pulled together to serve the citizens. In order to be competitive in the job market, it is necessary to have happy employees. It will cost $20 million over twenty years to invest in the people who give their heart and soul to this community. The fire department and police deparm~ent have approved contracts and the remaining employees deserve the same thing. She referred to the $34 million bond issue for a golf course and compared that to the $20 million over twenty years for the employees. She said let's get the priorities straight. She supported the staff recommendation. She pointed out there was also a joint closed session with the City of Livermore to discuss the management package for the fire management. There is a ten percent reserve and she reiterated the City of Pleasanton is fiscally responsible. The City has handled state budget cuts before. Regarding the comments about a spiral affecting other cities, she did not believe it was a foregone conclusion that cities will fail one by one and we are all going to end up in bankruptcy. The Pleasanton staffis fiscally responsible and will be way ahead of the curve. This is an eight-year contract and when other cities' expenses are going up every year, maybe people will appreciate this contract. We need to keep employees happy and productive. If there are financial difficulties ahead, she was confident the employees would assist in dealing with difficult times. Pleasanton City Council 17 10/01/02 Minutes