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THE CITY OF 07 -• ! ° -'- "' CITY COUNCIL AGENDA REPORT pLE ASANTONo January 18, 2011 City Manager TITLE: REVIEW OF THE CITY'S STRATEGY FOR MANAGING PERSONNEL COSTS SUMMARY Pleasanton maintains a comprehensive set of fiscal policies, which have helped it develop into a premier comrunity with quality facilities and services (see Exhibit A). In accordance with these practices, over the past few years, the City Council and staff have taken significant steps to control costs, maintain services that meet community expectations, and enact measures to minimize the impacts of the struggling national, state and local economies. As a result, the City remains one of the few public agencies to maintain a balanced budget, despite the worst economic recession to afflict the state and nation in modern times. Our approach to balancing the budget started in fiscal year 2008/09 and has included a wide range of approaches, one of which is controlling personnel costs, as these represent the largest portion of the City's budget. Our core function as local government is to provide services to the community in the form of public safety (e.g. police and fire), library services, parks maintenance, utility services (e.g. water and sewer services), code enforcement and streets maintenance, to name a few. Most of these activities are labor intensive functions that require a certain degree of constant staffing to ensure service delivery and meet community expectations. In our situation, personnel costs have many elements including salaries, health care, post retirement medical, workers' compensation, miscellaneous benefits, and retirement costs. In response to recent public and Council questions regarding personnel expenses, this report has been prepared in order to provide a general outline of the City's efforts to control these costs. As has been demonstrated over the last several Council meetings, the City Council and City staff monitor the operating budget routinely and the Council makes adjustments to revenues and expenditures to ensure the City's budget is constantly balanced. Recent examples of these reports are attached as Exhibits B and C to this staff report and demonstrate the City's constant approach to the maintenance and monitoring of the community's fiscal resources.