The City Manager presented a 6-Point Plan of Action in response to the City's fiscal and budget crisis to the City Council at the annual future fiscal issues workshop on January 28, 2003. The report described the nature and scope of the financial problems that the City is facing, outlined six budget strategies to address these problems, and presented an approach for providing public input and a time frame for implementation.

The Fiscal Management Sub-Element to the City General Plan contains several goals, policies, and action statements that address the City's annual budget and resource allocation plan. These can provide guidance for the City Council as it considers the proposed revisions to the 10-Year Plan.

Goal 7.1B. Financial Practices: Maintain sound financial practices, which meet all applicable standards and direct the City's financial resources toward meeting the City's long-term goals.

Policy 7.1B.1 Resource Allocation: Allocate resources in direct relation to general plan goals.

• Action Statement 7.1B.1a Direct capital improvements so as to implement General Plan goals.
• Action Statement 7.1B.1b The City Manager should include in each proposed budget a statement describing how each proposed improvement (category of improvement) accomplishes General Plan goals.
• Action Statement 7.1B.1d Involve citizens in the budget process to the extent feasible.

Policy 7.1B.2 Capital Improvements, Maintenance and Replacement: Provide for optimal maintenance of capital improvement and schedule equipment for future replacement at the most cost-effective time.

• Action Statement 7.1B.2a Maintain capital improvements to the level required to adequately protect the City's capital investment and to minimize future maintenance and replacement costs.
• Action Statement 7.1b.2b Give high priority to replacing capital improvements when they have deteriorated to the point where they are hazardous, incur high maintenance costs, negatively affect property values, or no longer serve their intended purposes.

Policy 7.1B.5 Performance Budget System: Maintain and refine the Performance Budget System to assure its use for multi-year planning, full cost accounting and budget monitoring.

• Action Statement 7.1B.5a Present an updated 10-Year Capital Improvement Plan to the City Council annually.

Policy 7.1B.6 Capital Improvements Funding: Use all available funding sources to finance capital improvement projects consistent with City priorities.

• Action Statement 7.1B.6a Identify revenue sources for each proposed capital improvement project.

City staff provided Council with an information package on recommended revisions to the FY 2003/2004 10-Year Plan on March 5, 2003. This information package contained

• a list summarizing all projects contained in the 10-Year Plan, organized by group and providing the City Manager's recommendations;
• Attachment A to the 10-Year Capital Project Plan report that Council had received for a special meeting on February 26, 2003; and
• A project information sheet for all capital projects, providing a more detailed description of the capital projects included in the current 10-Year Plan (excluding utility projects), and describing whether the project is recommended or not recommended for future funding.

In addition, the City Council expressed interest in reviewing the criteria that the City Manager used in making his recommended revisions to the FY 2002/2004 10-Year Capital Projects Plan. (See attached report from Council Members Walker and Fowler.) It is anticipated that the City Council could use these criteria, or a different set of criteria, in providing preliminary policy direction on the recommended revisions to the 10-Year Plan. Following a public hearing when members of the public could provide ideas, suggestions, and opinions on the possible criteria, the criteria could be formally adopted by Council. A special meeting has been scheduled for March 20, 2003 to allow Council to consider the recommended revisions to the 10-Year Plan, and to provide preliminary policy direction.

The City Manager used four criteria in recommending whether existing projects should be either retained at current funding levels, retained at changed funding levels, or deleted from the current 10-Year Plan. These same criteria were used in recommending new projects to the plan. The criteria are:

• Projects that preserved the integrity of the City's existing infrastructure systems were retained or added.

• Projects that addressed a life safety issue or problem were retained or added.

• Projects that leveraging outside funding from a governmental agency were retained or added.

• Projects that are currently under construction, are expected to be completed this fiscal year, or where suspending construction work now would jeopardize the integrity of the project were retained or added.

These criteria are described in more detail in the "Recommended Revisions to the 10-Year Capital Plan" report. The City Manager used one or more of these criteria in making recommendations regarding specific capital projects.