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Stephens expressed concerns that the City does not have enough funds budgeted for street maintenance. The City uses asphalt for repavement maintenance, and since asphalt is oil base, the continuing increases in oil prices may affect the City's ability to maintain the streets. Jermanis added that the City should maintain a $4 million annual budget for street pavement maintenance, below the current budget of $1.2 million. Mayor Young inquired about the timetable for the Senior Center's demolition, parking lots, and other improvements. Joseph stated that the building will be torn down during July 2006. Jermanis shared that he would seek a determination from the City's IMS Manager regarding the Mayor's inquiry on whether a conduit of the fiber optic cable at the Water Pollution Plant could be sold to businesses as a cost recovery measure. 2. Discussion Regarding the 2006-07 Fire Services Contract Budget Gilbert presented Alameda County's proposed Fire Services FY 2006-07 Budget. The contract between the City and the Alameda County Fire Department (ACFD) began in Fiscal Year 1995-1996. Currently, there are 5 stations, and 7 engine companies that average about 8,100 calls per year, with 70% of the calls being medical responses. The proposed contract for 2006-07 calls for an increase of approximately $1.1 million. The increase includes about $325,000 in overhead and operations adjustments, a 4.3% COLA, $20k for a contract fire inspector and a 30% share for a new community emergency preparedness manager. ACFD also recommends replacing 4 engines and 1 truck using a possible 5 plus year lease option. In response to the Mayors request on mandatory overtime, Gilbert explained that each station requires a minimum of 3 firefighters. If there are less than 3 firefighters and no one volunteers, then it becomes mandatory overtime. In response to Stephens regarding who negotiates and approves the labor contracts, Gilbert explained that the County labor relations department negotiates the contract. Gilbert also shared the current labor contract is within the median range when compared to other organizations, and that their proposal does not include GASB 45 reserve funding. Starosciak expressed frustration at the proposed cost increase and proposed recommendations that include: cutting off discretionary overtime when staff attends professional conferences, conducting more in-house training, and seeking other sources for Medical supplies to reduce costs. Starosciak explained further that the City has been cutting employees and services, and can't afford an additional fire employee. She also shared her discouragement that if the Business license tax passes, half of projected revenue will only go towards funding the increase in the proposed ACFD contract. Starosciak asked whether it would be more cost effective to bring back the City fire department versus contracting with ACFD. Discussion will be moved to the May 8, 2006 Council Work Session. 3. Discussion Regarding FY 2006-07 Budget Process Baloca provided a FY 05-06 year end projection and a brief overview of the FY 06-07 Proposed Budget. The Budget includes one year set -side towards the City's GASB 45 (Retiree Medical Liability). Finally, Baloca reiterated that the FY 06-07 proposed budget contains a $755k structural deficit that is balanced G:ADEPT\Committees\FinanceAHighlights\CITY COUNCIL FINANCE COMMITTEE 4-25-06 FINAL.doc