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i the legislature to let them know the impacts and losses municipal government suffered. Council then asked about other fees. Mr. Ponty explained that recovery of development project fees is going well. Council also asked questions about the Transient Occupancy Tax and the Business tax. Peter Ingram, City Manager, then requested Council direction on specific items listed on slides 14 and 15. The items covered included: • Reserves: Council consensus was to keep with the current Reserves policy • On the Use of Reserves: Council discussed the prior direction of 33%, 25%, 10% and possibly lowering it for the current and next year. This could bring the use of Reserves below the anticipated 25% and 10%, in order to stay above the 15% threshold set by the Reserves policy. Council consensus was to have staff bring back an option that includes cuts that are more aggressive and include less use of Reserves. This could mean higher reductions and less reliance on Reserves. Council discussed the reserves being a "cushion" for special projects such as economic development and other initiatives that might come up, or a calamity. In addition, Council was unsure about what the state takeaways might entail consequently Council voiced the importance of having a bucket of money to possibly deal with those. One Council Member noted that living on one's savings is not a healthy approach. Vice Mayor Aguirre commented that the deficit this year was fully covered via the use of Reserves. Council discussed slides 10 and 12 in detail going over different options it might want to consider. City Manager Ingram explained that there are three options as outlined on slides 7, 10 and 11. Council consensus was to also see options with cuts that exclude the use of reserves (slide 10). • Utility Users Tax: Mr. Abrams, Interim City Attorney, provided background information on prior Council actions and elections. He interpreted prior impartial analyses and shared the question that was put to the voters. He concluded that in reviewing the official record it is clear that there was an expectation that capital improvements would be the first use of funds from Utility Users Tax. One Council Member considered the trust and respect of the voters more important than the legal possibilities. Another Council Member agreed with this comment because of the uncertainty of the current budget times. This Council Member also felt uncomfortable going after more taxes. Another Council Member agreed with this approach. It was suggested that future business license taxes include modernized language with set increases built in. On the Executive Team recommendations, Council said that packages are important but some switching between the options may be necessary. Council wants to be able to see the nexus between the cuts and the impact on the community. It was asked that the repercussions of the cuts to the community be clearly articulated. Vice Mayor Aguirre wanted to have an approach that includes partnering in decisions and she would like creativity with revenues, higher cuts and less use of Reserves. She is supportive of the 8%. Another Council Member would like to look at a two-tiered retirement system with everything being on the table. This Council Member is looking for strategies and to JOINT CITY COUNCIL/ MARCH 8, 2010 REDEVELOPMENT AGENCY BOARD MEETING MINUTES PAGE 7 MINUTE BOOK NO. 63 Page No. 050