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Regular City Council Meeting Monday, July 21, 2008 Page 12 13. Business Items -Presentations, Discussions a. 2008 Second Quarter Financial Report Finance Director Chris Miller presented the Second Quarter Financial Report for 2008. Mr. Miller advised that, in aggregate, the City's fiscal condition was as ex- pected, with a few exceptions. Mr. Miller noted that those specific items were de- tailed in the staff report and, while calling for careful observation, did not appear to indicate along-term trend, and represented areas the City was susceptible to in an ongoing basis. Councilmember Pust thanked Mr. Miller for including the "Percent of Normal" column for comparison with average year expenses/revenues. Councilmember Roe noted the reference (page 4 of 15) to the General Fund's re- liance on property taxes, given other non-tax revenue sources remaining stagnant, over the long-term, not just in 2008. Finance Director Miller concurred; noting that this was anticipated, but an area of concern, even though the General Fund remained in good financial condition. Councilmember Ihlan noted the Recycling Fund summary expenditures exceeding revenue during the first six months. Mr. Miller advised that this was due to a timing difference on the revenue side, and if an actual accrual had been done, revenues would have exceeded expendi- tures for those months. b. 2009 - 2018 Capital Improvement Program (CIP) Finance Director Miller presented a revised 2009-2018 CIP, providing additional detail for major capital items anticipated over the next 10 years by department. Mr. Miller noted that this document was a work in progress, much like the strate- gic plan, and was staffs first attempt at a 10 year CIP, and would be expanded and built upon in coming years, with more detail available at the Council's re- quest and discretion. Mr. Miller encouraged Councilmembers to have a dialogue regarding major capi- tal items, realizing the $100 million in capital assets detailed, with $95 million identified for replacing existing infrastructure, assets and rolling stock; and no monies designated or available for new capital items. Mr. Miller, based on previ- ous discussions, sought to impress upon the City Council the funding gaps, and need for policy discussions on how to rectify those situations through additional priorities from a global sense, relating to staff specific processes and systems that should be emphasized. Mr. Miller advised that staff welcomed guidance and/or feedback from the City Council on this recommended CIP budget; and noted that asset replacement funding mechanisms were well behind in some areas (i.e., parks