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7.1.A. - Page 13 <br /> 9. BUDGET STUDY SESSION I - City Council/SuccessorAgency Board 7:25 p.m. <br /> City Manager Dr. Bell presented a report regarding the Fiscal Year 2013-2014 budget <br /> proposal. This is the second year of a 2-year budget process. Most of the changes in <br /> the budget dealt with various reorganizations. Before he went into the details, he <br /> brought up the City's aging workforce and he's anticipating the anticipation of <br /> retirements. Dr. Bell then addressed each reorganized department and showed the <br /> advantages and fiscal benefits (presentation on file). He then expanded on the <br /> employee cohorts and organizational efficiencies. <br /> Finance Director Ponty made a presentation on the General Fund Reserves and <br /> Educational Revenue Augmentation Fund (ERAF) projections. He provided an update <br /> on the property taxes and revenue taxes and that these will be tied to the economy in <br /> the next few years and that they are the general drivers as the City's source of revenue. <br /> He mentioned that it is anticipated that sales tax revenues will also increase. He <br /> alluded to the taxability of electronic software. <br /> One Council Member brought up other revenues and taxes and what those were. <br /> Finance Director Ponty said that it was a combination of revenue such as revenues from <br /> other government agencies grants, franchise fees, building permits, etc. He then <br /> discussed expenditures, such as the increase in salaries, which overall are 3% more <br /> than the prior budget and it includes the City's various reorganizations. Mr. Ponty <br /> mentioned that Public Safety has the largest expenditures due to their 24/7 operations. <br /> He also discussed City services and employee costs. <br /> Mr. Ponty then highlighted the general fund assumptions in the next five years in that <br /> property, sales, and transient occupancy taxes. He doesn't see any negative impacts <br /> from the federal or state government but that is hard to predict. But, Mr. Ponty said that <br /> in FY15-16 he anticipated serious increases in employer retirement contributions and <br /> this could be around $3 million in additional costs. <br /> He also provided specific information on the Public Employees Retirement System <br /> (PERS) contributions. He addressed the assumed rate of investment return and <br /> impacts to the general fund. He added that PERS is researching the mortality <br /> assumptions. Their report will become public next spring and would go to the PERS <br /> Board for approval. Mr. Ponty said that these are estimates and not exact figures. <br /> He then spoke about the ERAF refunds and mentioned that there are two broad <br /> proposals in the State budget that could affect the City. The first is the increase of <br /> school revenue limits and the second is to get rid of categorical grants. Mr. Ponty said <br /> that the County of Education is urging the City to be cautious. <br /> He then covered the projections and the deficits. Currently and the next year, there is a <br /> surplus of revenues. But, starting in the Fiscal Years 2014-15 through 2017-2018 there <br /> will deficits of up to 5%, but is manageable for the City. He will continue to monitor the <br /> situation and bring the Council a budget update in few months. <br /> Some Council Members asked questions such as were other factors included in the <br /> assumptions other than ERAFs and what was included in the increase of health care <br /> JOINT CITY COUNCIUSUCCESSOR AGENCY BOARD June 3, 2013 <br /> MEETING MINUTES PAGE 6 <br />