CC MIN 2013-06-03 Joint w/ Successor

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He then covered the projections and the deficits. Currently and the next year, there is a surplus of revenues. But, starting in the Fiscal Years 2014-15 through 2017-2018 there will deficits of up to 5%, but is manageable for the City. He will continue to monitor the situation and bring the Council a budget update in few months. Some Council Members asked questions such as were other factors included in the assumptions other than ERAFs and what was included in the increase of health care costs. Mr. Ponty answered: other factors were included such as health care and salary costs; with health care costs, the City is looking at 5% or 6% increase per year, because those were the indicators from PERS and discussions with actuaries. Another Council Member asked how the school districts are handling the ERAF. According to Mr. Ponty, if the revenue limits go up, then the categorical grants would hurt them because they will lose the money. He also added that each school district, including the college district, has a unique situation. The same Council Member suggested talking with Jan Christensen and with the Belmont-Redwood Shores and Redwood City School Districts. Another Council Member said that she and Mayor Aguirre have joined with the Redwood City School District in sending a letter to the Governor that addresses the State's proposal on funding schools and the different school districts. She too would like to know how it will affect the City's partnerships. Mr. Ponty then shared the prognosis for the General Fund Projected Reserves and opined that the City is having a healthy revenue growth. His final items covered were the areas of concern which included: sales tax, retirement contributions, ERAF refunds, workers' compensation costs, and State and Federal fiscal situations. One Council Member inquired about CaIPERS and how they make their earnings and how are they sustainable. Mr. Ponty explained that CaIPERS needs a high return on their investments; and, if they do not get that, then CaIPERS has to look for funds elsewhere. The same Council Member also brought up revenue services and the breakdown between businesses and non-businesses components on the website. She wanted to know if the City is placing their Economic Development efforts in the areas where they see the most revenue growth. Dr. Bell said that the Economic Development Manager's primary foci are on business retention and understanding long term needs. He also added that the overarching goal of the Chief Actuary is to have PERS system fully funded in the next thirty years. Vice Mayor Gee inquired about the inflation assumption and how that is counted in the forecast. Mr. Ponty answered that employee costs, salaries, and other details contribute to the assumptions. Vice Mayor Gee also asked how San Mateo County is now in the predicament that they are in concerning ERAF. Mr. Ponty explained that it was a combination of factors. Dr. Bell briefly mentioned the Capital Improvement Program (CIP) budget since the Council had seen this at the April study session. He asked Council to approve this item at the next Council Meeting. Furthermore, Dr. Bell discussed about his retreat with the Executive Team and their focus on organization adaptability. Specifically, he explained about the workforce JOINT CITY COUNCIL/SUCCESSOR AGENCY BOARD June 3, 2013 MEETING MINUTES PAGE 7 MINUTE BOOK NO. 64 Page No. 367