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6.A. - Page 31 of 114
<br />Daly City's pension contribution costs are projected to increase from FY 2017-18 by
<br />$14.64 million (111.5 percent) to $27.78 million by FY 2023-24 and by an additional $4.63
<br />million (16.7 percent) to $32.4 million by FY 2027-28.204 The City's total pension costs
<br />(Ca1PERS and bond repayments combined) are projected to increase over FY 2017-18
<br />costs by $15.55 million (78.7 percent) to $32.36 million by FY 2023-24. Total costs in FY
<br />2024-25 drop because the bonds will be fully paid off by the end of FY 2023-24. From FY
<br />2024-25 to FY 2027-28, annual pension contribution costs to Ca1PERS rise by $2.92
<br />million (9.9 percent) to $32.4 million (up from $29.48 million in FY 2024-25.205
<br />The City's projected pension contribution costs were not included in its FY 2017 and 2018
<br />budget206 but are set forth in its readily -accessible FY 2019-20 budget .207 They are also set
<br />forth in greater detail in the report of its actuarial consultant — Bartel Associates, LLC .208
<br />However, in order to find the Bartel Associates projections online, it is necessary to
<br />manually search through City Council meeting agenda packages, which can be accessed at
<br />the following website: www.dalycity.org/City Hall/Meeting Agendas_
<br />and_Minutes/City Council.htm (last accessed on May 23, 2019). That search would
<br />eventually lead to the agenda package for the City Council meeting on March 27, 2017209,
<br />which includes the report from Bartel Associates, LLC dated March 27, 2017.210
<br />Financial Overview — Daly City
<br />Daly City describes itself as being in a "precarious financial situation" and that it "has
<br />balanced recent budgets through major workforce and service reductions."211 The City
<br />reports that, out of the ten largest cities in San Mateo County, it has the lowest median
<br />household income, per capita income and median home value, the highest unemployment
<br />rate and second highest poverty rate. 212 Absent significant changes to revenues and/or
<br />expenses, the City forecasts that it will experience general fund deficits beginning in FY
<br />2018-19 with a $4.4 million deficit that rises to $12.9 million in FY 2023-24. The forecast
<br />projects a cumulative deficit of $98 million over the ten years FY 2017-18 through FY
<br />2027-28, with the City's unassigned general fund reserves dropping to zero in FY 2021-
<br />22.213 The foregoing forecast numbers do not factor in a recession between the present and
<br />20' Appendix A. Ca1PERS Actuarial Valuation — June 30, 2017 Miscellaneous Plan of the City of Daly City, p. 4.
<br />Ca1PERS Actuarial Valuation — June 30, 2017 Safety Plan of the City of Daly City, p. 4. Bartel Associates, LLC report
<br />to City of Daly City, March 27, 2017, pp. 24 & 44. The annual pension cost projection numbers are given through FY
<br />2027-28.
<br />los Bartel Associates, LLC report to City of Daly City, March 27, 2017, pp. 24 & 44. Daly City, City Council Meeting
<br />presentation slides re: FYs 2019/2020 Comprehensive Biennial Operating and Capital Budget, April 12, 2018, p. 11
<br />206 Daly City, Comprehensive Biennial Operating and Capital Budget for Fiscal Years 2017 and 2018.
<br />207 Daly City, Comprehensive Biennial Operating and Capital Budget for Fiscal Years 2019 and 2020, pp. 19-20.
<br />These pension cost projections go through FY 2027-28.
<br />208 Bartel Associates, LLC report to City of Daly City, March 27, 2017, pp. 24 & 44.
<br />209 Daly City, Agenda for City Council Meeting on March 27, 2017.
<br />210 Bartel Associates, LLC report to City of Daly City, March 27, 2017, pp. 24 & 44.
<br />211 Daly City Budget Forecast Model & Long -Term Financial Planning, PFM Consulting LLC, June 25, 2018, p. 29.
<br />Daly City, Comprehensive Biennial Operating and Capital Budget for Fiscal Years 2019 and 2020, p. 17.
<br />212 Daly City Budget Forecast Model & Long -Term Financial Planning, PFM Consulting LLC, June 25, 2018, pp. 6 — 8.
<br />211 Ibid., pp. 14 & 15.
<br />2018-2019 San Mateo County Civil Grand Jury 24
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