CCMIN060805 - Laserfiche WebLink

individual projects, which was developed in close cooperation with the Mayor, City Council, and City Manager. Collectively these vision categories are intended to inform the community of the work plan the Council and the City Manager intend to embark upon within the next year. It also provided the City Manager framework for preparing the budget and CIP. He believed the budget reflected the City Council priorities including the Bemat property, the General Plan update, the Callippe Reserve Open Space project, golf course project, and certainly Public Safety. The budget also maintains core service levels, addresses all new programs and projects initiatives prioritized by Council and implements measures to promote long-term fiscal sustainability. These goals can be achieved with the spending plan that staff presented to Council that still operates within the City's fiscal means. Fortunately for the City of Pleasanton, careful planning and a diversified local economy have allowed the City to balance the budget without reductions in service or increases in fees and or taxes. However, even with the City's impressive financial standing compared to most jurisdictions, the City's spending patterns over the next several years need to be closely monitored to ensure that its operating position remains positive. While revenue growth remains positive as the City's various businesses sectors continue to grow and pay dividends and property values both on residential and commercial sides continue to grow, economic benefits such as these are being rapidly off set by things such as labor costs, ever present threats by the State in diverting local revenue to balance its budget, and the sluggish economic recovery in the Bay Area. Mr. Fialho briefly covered the increase in labor costs. As Council is aware, in most public and private sector employers, the single greatest factor driving expenditure growth in any budget is labor costs. Specifically for the City, the costs that have been exceeding inflation can be categorized in three areas: retirement benefits, medical benefits and workers' compensation benefits. In addition to employee benefits, the most significant and unfortunately recurring threat to the City's financial security is the State. The State is once again facing a budget crisis and continues to utilize, one-time revenues to balance the budget, and this practice continues to erode the States fiscal position and continues to expose local govemments, like Pleasanton to practice of diverting local revenues to balance its budget, which has been their practice since the early 1990's. Since the early 1990's, the City of Pleasanton has lost over $70 million dollars to the State to balance its budget and equals to one year's worth of general fund revenue. That revenue could have been used for local services like public safety, or towards capital improvement projects, like the Bernal property. The third piece to that is the external factor that is affecting the City of Pleasanton, which is the economy. While there are indications the economy is improving, the pace of recovery has been slow, interest rates are beginning to rise, there's still a sluggish job market regionally, and higher oil prices affect the bottom line since the City relies on a lot of those activities locally. Mr. Fialho reviewed some of the highlights that were in the budget and stated they would be presented in further length during Ms. Rossi's presentation on the operating side. He said some of the significant revenue elements in the 05-07 budget included the area of sales tax, property tax, and hotel tax, which is the City's primary source of income for the general fund. As the budget is prepared, staff relies on projections and projections are only as good as assumptions. Staff attempts to present to Council some conservative assumptions. In the area of sales tax revenues, staff has City Council Workshop 2 06/08/05