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City Council <br />Meeting Minutes <br />August 9, 2016 <br />Page 3 of 7 <br />involved to prioritize streets and will use their best discretion to pick streets for paving. <br />Councilmember Leh suggested a range of 70-75 and on the low end 30-35. He agreed <br />there is a need for a certain amount of staff discretion based on budget priorities each <br />year. <br />Public Works Director Kowar stated staff is currently working on a five-year plan for a 75 <br />PCI with no streets lower than 35. <br />Mayor Pro Tem Lipton agreed to those numbers as long as there is some discretion on <br />a year-to-year basis on what streets to pave based on current goals of the Council. He <br />asked that inflation be included in the estimates of future funding needs in the CIP. <br />Consensus was to have a paving policy and budget funding for an average of 75 PCI <br />with no street lower than 35, but giving staff discretion each year to determine which <br />streets need to be done each year in discussion with the City Council. <br />City Manager Fleming reviewed the budget proposed schedule for the remainder of the <br />year and asked if this process was acceptable to the City Council. Council agreed to the <br />calendar with minor changes. <br />City Manager Fleming stated the overall approach is to have the budget reflect the <br />goals and priorities for each program area as set by the City Council. He stated items <br />are prioritized each year with paving being the largest expenditure and the highest <br />priority. He asked if there are any other key things the Council wants to focus on related <br />to the budget. <br />Councilmember Leh stated he would like the Council to focus mainly on the bigger ticket <br />items. <br />Councilmember Loo stated many items were moved from CIP to the operating budget <br />and asked if there are criteria for when that happens. City Manager Fleming noted it is <br />somewhat subjective. Councilmember Loo stated it creates confusion for people. <br />Councilmember Leh agreed it is confusing and not transparent. <br />Finance Director Watson noted the CIP evolved over the years to be anything that was <br />out of the ordinary. Staff is now trying to move back towards just Capital items in the <br />CIP and keeping maintenance and operations in the general fund. <br />Councilmember Maloney noted there is no clarity in the code on what is capital so it <br />feels subjective. He would like to see some clarity in the code. Watson noted there is a <br />threshold for capitalizing items which is "anything over $5000 for one item and a useful <br />life greater than one year," but he stated it isn't a clear line for many items. <br />Mayor Pro Tem Lipton stated program budgeting should bring some clarity to this as all <br />items will be coded to a program regardless from which fund it is paid. <br />