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MINUTES Page 5 City of San Leandro City Council and San Leandro Redevelopment Agency Joint Meeting-June 5, 2006 Councilmember Starosciak commented that she would like the Council to consider including a community service component for the tenants. Mayor Young asked if the property could be screened from view until the work is completed and suggested posting a sign at the site which reads, "Your redevelopment dollars at work" or something similar. M/S/C Grant and Nardine. Ayes: 7; Noes: 0 The City Council recessed from 8:20 to 8:30 p.m. B. Presentation of Proposed Fiscal Year 2006-07 Budget. (1051) City Manager Jermanis gave a PowerPoint presentation providing an overview of the proposed FY 2006-07 budget. Councilmember Santos commented that he believes the $1.3 million reserve for retiree medical funding (GASB 45) is overstated, and a portion should be reallocated for uses requested by the community. He suggested the City could save money by merging the Risk Management and Employee Benefits/Workers Compensation divisions. Councilmember Nardine asked whether the City would be committed to the proposed expenditures for Fire if Measure I did not pass. Mr. Jermanis indicated that if Measure I failed, the City could defer some of the proposed expenditures for Fire and other purposes. Councilmember Nardine commented that she would like her suggestion regarding volunteer police patrol to be given serious consideration. Mr. Jermanis noted that the number of Police Patrol officers has not been reduced, and any additional officers would likely be added to other Police services such as School Resource Officers, Traffic or Investigations. Councilmember Badger expressed concern regarding the Pavement Management Program and the continued deferral of street maintenance. Mr. Jermanis indicated the Council may need to refer the matter to the Finance Committee to determine how to fund street maintenance work. Mayor Young asked what would happen if the GASB 45 requirements are not met. Mr. Jermanis noted that beginning in FY 2007-08 the City must disclose its $15 million obligation and must set aside funds in reserve to demonstrate sound fiscal management. He noted that failure to do so could affect the City's credit rating and audit statements. Vice Mayor Grant asked what would happen if Measure I, the Business License Tax increase, did not pass. Mr. Jermanis indicated that the City would be able to adopt a budget on June 19; however, the deficit would increase to $2.5 million, which would be balanced through use of reserves. The Finance Committee would then review the budget and recommend reductions.