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<br />Attachment 2 6.3C <br />Page 8 <br /> <br />unlike the general fund there are no revenues available to offset this cost in the <br />other funds. <br /> <br />The tables below illustrate the recommended funding schedules: <br /> <br />General Fund <br />The following table illustrates the impact of staffs recommendation on the general fund <br />over the next seven fiscal years: <br /> <br />~ <br /> <br />07/08 <br />$ <br /> <br />08/09 <br />$ <br /> <br />09/10 <br />$ <br /> <br />ARC Fully <br />Funded <br />',; ":'~~i11'= <br /> <br />{1tb~';"" <br />. $. . <br /> <br />'iji~3- <br />$' <br /> <br />. 1;ijk";4 <br />, -.$' <br /> <br />Proposed fundIng <br />of ARC <br /> <br />363,100 <br /> <br />755.249 1,178,188. 1~1~it. 'ht;~'1~~. tj;&1~~ :~j_1~~~ <br /> <br />Amount from <br />"reserves..1 <br />Net general .fund <br />contribution <br />Total contribution <br /> <br />o <br /> <br />363 100 <br />363,100 <br /> <br />290.249 <br /> <br />465.000 <br />755.249 <br /> <br /> <br />. .'. .\ .~ <br />. .. .~"- ...... <br /> <br />,>.::~-\t <br /> <br />Total general <br />fund revenues <br />General fund <br />contribution <br />88 8 % of total <br />revenues <br /> <br />76.729.000 79.101.000 82.146.000 ;:~..~$ ~ >~~. <br /> <br /> <br />'.~' \:".,' '. <br />.... <br /> <br />0.47% <br /> <br />0.59% <br /> <br />0.87% <br /> <br />1~42% ." <br /> <br />2{~%; <br /> <br />2~"Ei% . <br /> <br />. 2"WtiO/v" <br /> <br />Enterprise Funds <br /> <br />2007/08 Water Fund <br />193,856 <br />1.01 % <br /> <br />2007/08 Sewer Fund <br />69,589 <br />0.560k <br /> <br />Proposed funding of ARC <br />Proposed funding as % of total revenues <br /> <br />Please note that the above amounts only reflect the net additional amounts needed to fully <br />fund the ARC within these funds. Since these funds are already paid for retiree medical <br />benefits under the "pay-as-you-go" approach, this latter amount is counted towards funding <br />the total ARC. <br /> <br />All Other Funds <br /> <br />Funding as % of payroll <br /> <br />2007/08 <br />1% <br /> <br />2008/09 <br />2% <br /> <br />2009/10 <br />3% <br /> <br />2010/11 <br />4.5% <br /> <br />Discussion with Rating Agency <br />Recently, staff conferred with Parry Young from Standard & Poor's (S&P), a credit rating <br />agency, regarding OPES. Mr. Young has published several articles on this subject and is <br />one of S&P's experts in this field. S&P regards OPES as a cost pressure without offsetting <br />resources that can have financial and management impacts on an agency. When rating an <br />agency, S&P looks at how governments manage these OPES liabilities. Mr. Young's <br />opinion of the recommended plan is that it "seems reasonable" and that It reflects "much <br />progress on focusing upon this liability." In terms of evaluating the credit quality of a debt <br /> <br />1 When the compensated absence liability is reduced the funds will then be transferred to fund balance <br />where they will be designated for financing a portion of the general fund's OPEB liability. <br />3 <br />