1. City Council Meeting June 21, 2011 1

2.  Conduct Public Hearing  Adopt 3 Resolutions As City Council 1.Adopt Annual Budget, 5-Year Capital Improvement Program, and selected fees 2.Adopt Findings of Benefit supporting Redevelopment As Redevelopment Agency 1.Adopt Annual budget, including Findings of Benefit 2

3.  Tonight’s Actions follow months of review by City Council and the Public ◦ January – Employee Town Hall Meetings ◦ February 15 – Budget Update and 5-Year Projection ◦ March 22 – General Fund Budget Workshop ◦ March/April – 7 Community Town Hall Meetings ◦ May 17 – Declaration of Emergency ◦ June 7 – Presentation of Proposed Budget ◦ June 8, 14 – Department Budget Workshops ◦ June 21 – Implementation of Emergency Measures ◦ June 21 – Public Hearing and Proposed Adoption 3

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6.  General Fund Budget Gap: $37 million ◦ Expenditure growth outpacing current revenues ◦ Revenue options limited due to State constitution, high unemployment, low per-capita income ◦ Equipment, technology, insurance compromised ◦ Reserves depleted  Immediate Actions Necessary ◦ Emergency Measures and/or Layoffs ◦ Must Adopt a balanced budget to authorize new year operations and to write checks 6

7.  Have tax revenues stabilized?  Unresolved employee negotiation/litigation  Workforce reduction/Leave cash outs  Re-benchmark of cost allocations  Inter-fund loans and debt risk General Fund backfill for other funds/programs  State budget actions/loss of Redevelopment 7

8. To address $37 million deficit:  Plan A ◦ Balance budget with draconian service reductions ◦ Cut 235 General Fund positions (42% over 3 years) ◦ Cut 253 total positions (25% over 3 years)  Plan B ◦ Modified Service Reductions - $12 million ◦ Labor Cost Reductions - $25 million (includes Fire)  Resolution adopts both Plans ◦ Authorizes City Manager to implement Plan B, and all or part of A as necessary 8

9.  $523 million 5-year Program ◦ Leverages Federal/State grants for Infrastructure  $61 million 2011-12 Appropriations ◦ $316,000 General Fund  Significant unfunded maintenance ◦ Requirements: $15 - $20 million/year ◦ Stormwater: $5-9 million/year 9

10.  Narrow range of fee updates at this time ◦ Pending resolution of labor cost of service  Proposals discussed during June 14 workshop ◦ Water ◦ Wastewater ◦ Parking 10

11.  Proposed Resolution also takes other administrative actions ◦ Sets annual appropriations limit ◦ Updates City Manager’s contract authority by CPI ◦ Adopts Redevelopment findings of benefit ◦ Approves expenditures to the League of Cities ◦ Approves expenditures to Community Partnership for Families 11

12.  Conduct Public Hearing  Adopt 3 Resolutions As City Council 1.Adopt Annual Budget, 5-Year Capital Improvement Program, selected fees Page 844 2.Adopt Findings of Benefit supporting RedevelopmentPage 859 As Redevelopment Agency Page 861 1.Adopt Annual budget, including Findings of Benefit Page 861 12