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3 Budget Impacts ­ Major Cost Items <br />34 The following major cost items are expected to impact the City's 2009 Budget.- <br />35 <br />36 ❖ Based on recent contract settlements with peer cities, the City is forecasting a 3.5% cost-of-living <br />37 adjustment for City employees. In addition, most City employees are eligible to receive pay-step <br />38 increases under the City's Compensation Plan which will also increase City costs. The total <br />39 financial impact on the 2009 Budget i <br />