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6.A. - Page 34 of 114 East Palo Alto Pension Contribution Costs — East Palo Alto East Palo Alto's pension contribution costs in FY 2017-18 were $1.64 million, up $0.149 million (10 percent) from $1.49 million in FY 2016-17.234 The City's FY 2017-18 pension contribution costs represented 17.7 percent of that year's covered payroll (up from 17.6 percent the preceding year) and 8.3 percent of its total general fund spending (up from 8.2 percent the preceding year). 235 East Palo Alto's actuarial consultant projects that the City's pension contribution costs will increase from FY 2017-18 by $1.18 million (71.7 percent) to $2.82 million by FY 2023-24 and by an additional $0.429 million (15.2 percent) to $3.25 million by FY 2027-28.236 The City's projected pension contribution costs are not included in its FY 2017-18 CAFR, or in its FY 2018-19, or FY 2019-20 budgets.237,238 In order to find these projected costs online, it is necessary to manually search through City Council meeting agenda packages, which can be accessed at the following website: www.ci.east-palo-alto.ca.us/AgendaCenter (last accessed on May 23, 2019). That search would eventually lead to the agenda package for the City Council meeting on May 15, 2018.239 The agenda package includes a report by Bartel Associates, LLC that contains annual pension cost projections.240 Financial Overview — East Palo Alto East Palo Alto has experienced substantial revenue growth in recent years 241 and describes itself as being "in a stable financial condition. ,242 The City notes that its opportunities include "a robust economy" and "an excellent location in Silicon Valley with 60 acres of vacant or underutilized land." However, the City also notes fiscal revenue challenges including "the lack of material increases in General Fund revenues for the near to medium term future," and continued organizational challenges such as "fewer staff than comparable cities," "ongoing retention and recruitment challenges," "unfunded Ca1PERS liabilities," and "an astronomical gap in deferred infrastructure and services created before the City's incorporation. "243 231 Appendix A. 235 Ibid. 236 Bartel Associates, LLC report to the City of East Palo Alto, March 8, 2017, Updated May 15, 2018, pp. 15 & 21. The report contains annual pension cost projections through FY 2027-28. 237 East Palo Alto, Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018. East Palo Alto, Adopted Budget Fiscal Year 2018-2019. East Palo Alto, Proposed Operating Budget for Fiscal Year 2019-20. 231 By way of clarification, however, East Palo Alto "notes that the actuarial projections contained in the Bartel study are utilized in graphical presentations to Council regarding FY 18-19 to FY 2025-26 forecasts of General Fund revenues and expenditures — including increased Ca1PERS costs to provide context for the City's need to contain program cost expansion." (Email from East Palo Alto, dated June 7, 2019.) 239 East Palo Alto, Agenda for City Council meeting on May 15, 2018. 2" Bartel Associates, LLC report to the City of East Palo Alto, March 8, 2017, Updated May 15, 2018, pp. 15 & 21. 21' East Palo Alto, Adopted Budget Fiscal Year 2018-2019, p. CM -2. 212 Ibid., p. CM -5. East Palo Alto, Proposed Operating Budget for Fiscal Year 2019-20, p. CM -2. 213 Ibid., pp. CM -3 & CM -5. 2018-2019 San Mateo County Civil Grand Jury 27