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touched. She also pointed out that there are Workers Compensation Funds of $1.13 million dollars and Self-Insurance Funds of $8.06 million dollars, etc. Mayor Pico noted that the reserve funds Ms. Ayala was referring to were funds that cities normally did not provide reserves for. He also pointed out that the City of Pleasanton had over $60 million dollars in reserves at the end of this fiscal year. The City is fiscally healthy because we have created a sustzinable financial situation. Mr. Bmzosky noted that out of the $48.5 million dollar reserve, $33 million dollars is for benefits, which leaves $15 million dollars in reserves. Ms. Ayala mentioned that the State of California is broke, and believed we need to be anticipating what could potentially filter down to the City level. Mayor Pico remarked that Council and staffhave been anticipatin§ this and have been prudent in saving and setting aside funds, which he believed is what has put the City in the financial position that we are in today. He credited this to residents and staff. He noted that the City has been extremely fortunate, which has been the direct result of this Council and the planning that preceded them. Councilmember Campbell concurred with Mayor Pico's comments and thanked staff for putting together a well thought out, conservative budget. Mr. Bmzosky wondered if it would put the City in a financial situation of a deficit if the Recession Reserves were used up in the next two years. Ms. McKeehan noted that expenses would need to be adjusted to meet the actual revenues which, in the short tem~, could be a variety of things. The reserves are money set aside and used as a safety net if revenues came in substantially less than projected, or if expenses were much greater than projected. She noted the City would not be in a deficit. It would be a matter of priority in order of spend'mg. Ms. Rossi pointed out that the General Fund Financial Policies allow the use of reserves, temporarily, to stabilize services if we mn into a situation where there is a sudden loss of revenue. She pointed out the differences between the City's policy and the State's Policy, as the State's policy is based on a year-by-year basis. The City of Pleasanton's policy is based on the long-term, and the fact that cities are required to have a balanced budget. Mr. Brozosky believed there was more control over expenses versus income. Mayor Pico asked the public for comments. Michael O'Callaghan, 125 W. Neal Street, commented that it was disheartening for citizens to feel that members of the Council have a preconceived idea of how they Pleasant City Council 12 10/21/03 Minutes