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In response to an inquiry by Mr. Brozosky, Mr. Fialho said the City is gaining additional police services in recognition of the General Fund appropriations increase in the first and second years of the proposed budget. He noted that staff prepared a fiscal analysis several years ago in anticipation of annexing the Bernal property. At that time, the analysis assumed adding a police beat once this property developed and it reached General Plan build-out. While that has not happened, he noted that regionally, significant growth has occurred, particularly in Livermore and Dublin and the City is experiencing impacts associated with it. He noted that ~taff discussed service levels and believed it was more important that over the next two years, three additional police officers were hired and long-term, work towards that additional beat if the financial resources are available. Mr. Brozosky referenced an Employee Costs spreadsheet that Council received. He expressed concern about the cost of medical insurance for existing employee versus retirees. He believed the City is spending approximately the same amount of money for retiree medical as for current employees. Ms. Rossi said the amount reflected is the accrual of money that is being set aside in the reserve, most of which is to pay an existing liability for the retirees medical, and the actual costs are significantly lower. Mr. Brozosky asked if personnel related costs are approximately 52 to 60 percent in addition to salaries for benefits. Mr. Rossi said the amount reflected is total personnel costs as a percent of the entire Operating Budget. Mr. Brozosky asked how much benefits are a pementage of salary. Ms. Rossi said benefits are approximately 33 percent of salary. Mr. Fialho pointed out that the Employee Costs spreadsheet illustrated total personnel costs as a percent of the operating expenditures. Total operating expenditures for 2004-05 is $107,880,00, and personnel costs is 52.3 percent of operating expenditures. Total benefits for medical and additional benefits are illustrated which reflects the subtotals for each items coupled with PERS and other ancillary personnel costs. Over the long-term, the City will need to look at things that will begin to minimize these costs over time. For the short term, the City is locked into labor contracts. For the long term, staff will consider other opportunities to begin to scale back or minimize the impacts over time. Mr. Brozosky asked when this would become an issue if not resolved by a certain year. Mr. Fialho said for the short-term, the five year forecast shows the City is balanced bearing no additional State impacts. For the long-term, it is part of long-term fiscal strategy that Council has included on its priority list that will be discussed sometime in the summer. In response to an inquiry by Mr. Brozosky, Ms. Rossi said the five-year forecast assumes that the City increases in the area of parks. Ms. McGovern expressed her concern with the many variables that come into play in the revenue section of the budgeting process. She asked staff how many times a year it presents the Operating Budget to Council so that adjustments could be made if revenues fall short, or expenditures are more than anticipated? Pleasanton City Council 24 06/21/05 Minutes