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longer. They were much further along than any other city. City Manager Fialho said in 2002 the City was nearly fully funded on the retiree medical side, but what happened since that time is that the cost of health care have exceeded inflation by double digits. He felt it was 12% in the first year and 17% in the second year. As those costs increase, the City must catch up and this was why the gap has increased over time. However, they were in a better position than most agencies and they will be coming shortly in the context of GASB 45 which requires agencies put aside current and future liabilities over a 20-30 year period. Councilmember McGovern said pensions and medical benefits are extremely important to her and she asked what the deadline was to have this amount fully funded. Mr. Culver said their implementation date was 2009 but the requirement is not that it be fully funded, but to take the long term actuarial accrued liability, determine what needs to be set aside every year to get there in 20 to 30 years and this is the amount the city must set aside, not the full amount. Councilmember McGovern referred to traffic, signalization projects, and she confirmed the City was working on the actual job description of the traffic engineer position, confirmed more dollars were being dedicated to the Council’s priorities in doing sound attenuation on heavily traveled streets in a systemized and prioritized way, the city was implementing safety projects around school sites, that bicycle and pedestrian master plan improvements are being funded in the 4- year CIP over two years in an amount not exceeding $100,000 and more dollars might be able to be funded, and that Council salaries should be brought up to what is allowed by law. Mayor Hosterman also confirmed with the City Manager there was an opportunity to raise stipends for Commissioners, as well, which would be brought back to the Council. Councilmember McGovern said she appreciated that staff worked hard to find ways of implementing some of the traffic improvements voiced by the community. She confirmed with the City Manager that the issue of the public/private sector would be discussed in July with the subcommittee and findings could be reported out in the future. Mayor Hosterman felt the City has been extremely fiscal responsible, able to deliver quality services, she thanked staff and felt there were future opportunities for future dollars in the coming years. City Manager Fialho said the budget is built upon Council priorities and staff has spent a lot of time on the operating and CIP budgets incorporating more of a Council- and goal- driven process than ever seen before. He said it requires a lot of time and especially thanked Steve Bocian and Dave Culver for their work. Motion: It was m/s by Thorne/McGovern to adopt Resolution No. 07-140 approving the 2007- 08/2008-09 Operating Budget and the 2007-08 Community Development Block Grant Program and Adopted Resolution No. 07-141 approving the 2007/08 though 2010/11 Capital Improvement Program Budget. Ayes: Cook-Kallio, McGovern, Sullivan, Thorne, Mayor Hosterman Noes: None Absent: None Abstain: None BREAK Mayor Hosterman called for a five-minute break and thereafter, the City Council reconvened the regular meeting. 23. Reviewed and commented on the Draft Subregional Planning Element of the General Plan City Council Minutes 12 June 19, 2007