AgdaPkt 2018-09-10 Joint SA PFA - Laserfiche WebLink

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6.1.C. - Page 2 fiscal challenges by adopting a Financial Sustainability Plan as part of the FY 2017-18 Adopted Budget. This plan includes reducing operating costs by approximately $6 million and increasing revenue by approximately $6 million in order to balance the City's budget over the next five years and pay down long-term financial obligations. The City has reduced operating costs by $3.7 million in the current FY 2018-19 adopted budget, and the City Council has voted to place two revenue measures on the November 2018 ballot in an effort to increase revenues. The revenue measures include a half -cent sales tax increase and a cannabis excise tax. Indeed, the City is a recognized leader in proactive financial planning and sound fiscal management. The City passes a balanced budget every year and is consistently rated by independent auditors and outside experts as having excellent financial planning, discipline, and management best practices. The Grand Jury report does not recommend specific policies or implementation measures to address pension costs; however, the report contains thirteen findings and four recommendations. The four recommendations are summarized below: 1. Schedule public hearings to engage residents in addressing the City's increasing pension costs and to develop a long-term plan to address them. 2. Develop and publish annually, a report on the City's website that details the City's pension obligations. 3. Annual reporting of the City's financial plan that evaluates options to address pension costs and annual public hearings to discuss and consider such options. 4. Develop and publish annually, a long-term financial plan to deal with rising pension costs The recommended City responses largely agree with the findings outlined in the Grand Jury report. In fact, there are numerous instances in the report where the City's sound financial practices are cited as examples of how other cities can proactively address rising pension costs. In addition to implementing the Financial Sustainability Plan, the City has taken the following steps to mitigate increasing pension costs, including: implementing a second tier pension in 2011; negotiating employee cost-sharing agreements where current employees pay between 8 percent and 18 percent of salary towards their pension costs; and establishing a Section 115 Pension Trust Account, with an initial deposit of $10.5 million, to pre -fund the City's pension obligations over time.