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Home My WebLink About2018-02-05 SpecialMINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF SANTA ANA, CALIFORNIA FEBRUARY 5, 2018 CALLED TO ORDER CITY HALL, ROSS ANNEX 20 CIVIC CENTER PLAZA, ROOM 1600 SANTA ANA, CA 4:12 P.M. ATTENDANCE COUNCILMEMBERS Present: MICHELE MARTINEZ, Mayor Pro Tem P. DAVID BENAVIDES VICENTE SARMIENTO JOSE SOLORIO SAL TINAJERO (4:22 P.M.) JUAN VILLEGAS COUNCILMEMBERS Absent: MIGUEL A. PULIDO, Mayor STAFF Present: RAUL GODINEZ, II, City Manager SONIA R. CARVALHO, City Attorney MARIA D. HUIZAR, Clerk of the Council PUBLIC COMMENTS • Jose Tapia, expressed strong opposition to the police officers who have been reinstated after video depicts illegal activity. CLOSED SESSION MEETING COUNCIL RECESSED to Room 2201 for Closed Session discussion at 4:14 p.m. CLOSED SESSION ITEMS - The Brown Act permits legislative bodies to discuss certain matters without members of the public present. The City Council finds, based on advice from the City Attorney, that discussion in open session of the following matters will prejudice the position of the City in existing and anticipated litigation: CITY COUNCIL MINUTES 1 FEBRUARY 5, 2018 1. CONFERENCE WITH LEGAL COUNSEL --EXISTING LITIGATION pursuant to Paragraph (1) of subdivision (d) of Section 54956.9 of the Government Code: a. Brandon Sontag v. City of Santa Ana, et al., Orange County Superior Court, Case # 30-2017-00902039-CU-OE-CJC b. Nicole Quilas v. City of Santa Ana, Orange County Superior Court, Case # 30-2016-00850502-CU-OE-CJC c. Santa Ana Police Officers' Association v. City of Santa Ana, Orange County Superior Court, Case # 30-2015-00801604-CU-OE-CJC d. Robert Reisse and Dana Reisse v. City of Santa Ana, et al., Orange County Superior Court, Case No.: 30-2014-00705090 e. Sky High Holistic v. City of Santa Ana, et al., Orange County Superior Court, Case No. 30-2017-00897912-CU-WM-CJC 2. PUBLIC EMPLOYEE EVALUATION OF PERFORMANCE pursuant to Section 54957(b)(1) of the Government Code: Title: City Manager and Clerk of the Council 3. CONFERENCE WITH LABOR NEGOTIATOR pursuant to Government Code Section 54957.6(a): Agency Negotiator: City Manager, Raul Godinez II Unrepresented Employees: Executive Management (EM) ADJOURNED THE CLOSED SESSION MEETING AT 5:32 P.M. AND CONVENED TO THE REGULAR OPEN MEETING REGULAR OPEN MEETING CLOSED SESSION REPORT — There were no reportable actions. CITY COUNCIL MINUTES 2 FEBRUARY 5, 2018 WORK STUDY SESSION WS -1. STAFF PRESENTATION OF THE FOLLOWING: • FISCAL YEAR 2017-18 MID -YEAR BUDGET REVIEW, • FIVE (5) YEAR FORECAST, • FISCAL YEAR 2018-19 PRELIMINARY BUDGET, AND • DISCUSSION AND DIRECTION REGARDING CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS) AGENDA • City Manager Overview / Governing Principles. • Pension Overview • FY 2017-18 Adopted General Fund Balance • FY 2017-18 General Fund Mid -Year Report • Preliminary FY 2018-19 General Fund Budget • Five -Year General Fund Forecast GOVERNING PRINCIPLES • Be transparent and honest about the problem • Use a comprehensive approach for all funds • Establish a vision, develop a budget that promotes long term sustainability, implement best practices and utilize a combination of cost reductions and revenue increases. • Use a multi-year approach to achieve financial sustainability • Identify core services and focus on funding core services • Provide clear vision and direction from leadership • Engage in a collaborative approach PENSION OVERVIEW • Current Overview & Funding History • Impacts to Unfunded PERS Liability • Impacts to City Budget • League of California Cities Study & Findings on Retirement System Sustainability • Strategies to Address Rising Pension Costs CURRENT OVERVIEW CaIPERS Fund • History of CalPERS 1932: 1947: 1998: Established as State retirement system City entered into CaIPERS "Golden Age" CalPERS peak!! • 95% of statewide Miscellaneous employees were on 2% at 60 Plan • 50% of statewide Safety employees had the 2.5% at 55 Plan Employer Contribution Rates CITY COUNCIL MINUTES 3 FEBRUARY 5, 2018 • 0% for Miscellaneous • 0-7% for Safety • Misc.: 1971-1995: 2% @ 60; 1995-2008: 2% @ 55; 2009 -Present: 2.7% @ 55 • Safety: 1974-2001: 2% @ 50; 2001 -Present: 3% @ 50 Funded Status for COWERS Fund r,r,a cvecarw.aswa, w oras.:...wJ.c awe. slab City of Santa Ana Retirement Benefits History Safety Plan History • 1974-2001: 2% at 50 • 2001 -Present (Classic Members): 3% at 50 • PEPRA Members: 2.7% at 57 Miscellaneous Plan History • 1971-1995: 2% at 60 1995-2008: 2% at 55 • 2009 -Present (Classic Members): 2.7% at 55 • PEPRA Members: 2.0% at 62 Up to 2% annual COLA for both Classic & PEPRA members Disability benefits; death benefits; survivor benefit; EPMC (classic only) PEPRA = Public Employees' Pension Reform Act IMPACTS TO PERS — UNFUNDED LIABILITY What Elements Impact PERS Rates? Mzc:l )%@35 3.0% @W • Ac)hen RMI • xd Fmplayees We 11 CITY COUNCIL MINUTES 4 FEBRUARY 5, 2018 1386 >.� bad W[n� 'nmure 1>m braJeNNuwe l00% 101% ®^^®runquns R 'W (JPfOmW 8lA6 6 .tlewaNstlm nv�aJ.hl.M. 61% immJ�bbm '1}Su..bV. R LItl16Mi 1PTw .... BM�gnam '\ �tlwmjwieLt mf ... •.w 1 n..r.ao-ao.. a, u w w w w w w u w u u u n u a s. m.ay.a,�wsum.w^ City of Santa Ana Retirement Benefits History Safety Plan History • 1974-2001: 2% at 50 • 2001 -Present (Classic Members): 3% at 50 • PEPRA Members: 2.7% at 57 Miscellaneous Plan History • 1971-1995: 2% at 60 1995-2008: 2% at 55 • 2009 -Present (Classic Members): 2.7% at 55 • PEPRA Members: 2.0% at 62 Up to 2% annual COLA for both Classic & PEPRA members Disability benefits; death benefits; survivor benefit; EPMC (classic only) PEPRA = Public Employees' Pension Reform Act IMPACTS TO PERS — UNFUNDED LIABILITY What Elements Impact PERS Rates? Mzc:l )%@35 3.0% @W • Ac)hen RMI • xd Fmplayees We 11 CITY COUNCIL MINUTES 4 FEBRUARY 5, 2018 Plan Demographics Miscellaneous • Retired employees or beneficiaries currently receiving benefits 1,328 • Separated employees entitled to but not yet receiving benefits 782 • Active employees 737 Total 2,847 Total Plan Participants: 4,241 Ca PERS Income by Source 2015 2017 UDIHi l 11 A Imo. �: KRI Sovrre: https://wwwso/pers.ta.gov/page/newtrown/ju-the�ecwd/I017/penslmbuck S.,r :Ca PEER nSheet 14 Safety (Police/Fire) 923 179 292 1,394 CITY COUNCIL MINUTES 5 FEBRUARY 5, 2018 w EKAMPLEI w ------------ s -sac ago• M M O �aaanaanra — a,erar CalPERS Changes Enacted During Past 5 Years • In response to deteriorating financial conditions, CalPERS began enacting a series of pension cost changes • March 16, 2012 — Change in Discount Rate From 7.75% - 7.50% • April 17, 2013 — Change in Amortization & Rate Smoothing Policy • February 18, 2014 — Change in Actuarial Assumptions & Asset Allocations • December 21, 2016, the CalPERS Board voted to enact two substantial new changes 1. Lower the discount rate from 7.5% to 7.0% (assumed rate of return) 2. Enact an accelerated payback schedule for all unfunded accrued liabilities (UAL) • The resulting effect of the two changes includes the following: • Discount Rate Reduction • Impacts employer rates beginning in FY 2018/19 • Option to accelerate the Unfunded Actuarial Liability Payment (30 to 20 years) SAFETY PLAN MaAd Valua of A.l. 7pal Yan Mon UabI14W Uni ndad Uabtdy $74&OM )1.06) j$V4.7M) $711.0M L1.a) tsm6M) fiundd 6xl• 73.1% 67.111 Ln7.W) )819AM) S.UPEW06/30fX17Lbh6dmRgmn*lh•017gj!I l Aw CITY COUNCIL MINUTES 6 FEBRUARY 5, 2018 MISC. PLAN 2015 3016 t7� $564.OM $549.W Ln7.W) )819AM) L$291.OM) ($Maim) TA% 67A% S.UPEW06/30fX17Lbh6dmRgmn*lh•017gj!I l Aw CITY COUNCIL MINUTES 6 FEBRUARY 5, 2018 Unfunded Pension Liability MA se.n.Y xe.ma.m. g $609.6 Sm0.0 $m0A $198.7 s.u. n.ox SmOA M,e FNztl ew: n.ax Snav MCA Sado Smog srww sw.vrmad an.:n Yx SNDA xNz: n.lx s mu mm Liability Assets Unfunded Liability Funded Ratio +3.3% -3.9% +22.3% -7.0% ma-ym. Ysavryw Yz�wvryes )BoeM1%rc) �M1%sul �BUM1%ss) )BM%an) PERS RATES: Employer Contribution Pdlm Rita 36.z% Sl1% M7% A9.1% 52.8% R,.UAL $9.3M $11AM $12.7M $11.SM $16AM MM. PIAR• 2018-19 2019-20 2020-21 2021 -II 2022-a PERS RITES 30.7% 353% 38.8% 41.9% 443% so,.a: CdPaa'PEj-'A*01) eWuWmeeemjwa Qq cfS=au u •4dWaenrplgnawdWtlm: f�Y+lam Safety (PD Only) Employees FY 18-19 For every $100 in salary, the City Pays $36 in Pension Benefits Salary + Pension Benefits = $136 FY 22-23 For every $100 in salary, the City will pay $53 in Pension Benefits Salary + Pension Benefits = $153 Miscellaneous Employees FY 18-19 For every $100 in salary, the City Pays $31 in Pension Benefits Salary + Pension Benefits = $131 FY 22-23 For every $100 in salary, the City will pay $44 in Pension Benefits Salary + Pension Benefits = $144 CITY COUNCIL MINUTES 7 FEBRUARY 5, 2018 LEAGUE OF CALIFORNIA CITIES PENSION STUDY • Local agencies comprise approximately 40 percent of all CalPERS members. • Local Leaders, comprising of mayors, council members, city managers and finance officers shared their own cities' stories and concerns during meetings in September & November 2017. • The message delivered was: the "employer just paying more"option is no longer viable. • Following these meetings where local leaders gave voice to the challenges they face delivering services as pension costs increase, the League decided to commission this study. • Key Findings: 1. Rising pension costs will require cities over the next seven years to nearly double the percentage of their General Fund dollars they pay to CalPERS; 2. For many cities, pension costs will dramatically increase to unsustainable levels; and 3. The impacts of increasing pension costs as a percentage of General Fund spending will affect cities even more than the state. Employee costs, including police, fire and other municipal services, are a larger proportion of spending for cities STRATEGIES TO ADDRESS RISING PENSION COSTS CITY COUNCIL MINUTES 8 FEBRUARY 5, 2018 PROJECTED (ALL PERS IMPACT FUNDS) ina =&13.7%wu $7. M YBn McMMb $BSM �• N<•r• $7 �➢ Fav / L3M fmn 1 .1119 er•br- prerWiMan 5wn 5na $mn $1a.1 $uH $169 $IBAM $19A baon $uz n v.ss .vvw Eaaema u.pma ,. rvn.zz rva. rAi.1.a r,q.a.a w.pa.a r.y.a.d w.a.rvsm Ba. .� 111 ..,nrv.a 23 LEAGUE OF CALIFORNIA CITIES PENSION STUDY • Local agencies comprise approximately 40 percent of all CalPERS members. • Local Leaders, comprising of mayors, council members, city managers and finance officers shared their own cities' stories and concerns during meetings in September & November 2017. • The message delivered was: the "employer just paying more"option is no longer viable. • Following these meetings where local leaders gave voice to the challenges they face delivering services as pension costs increase, the League decided to commission this study. • Key Findings: 1. Rising pension costs will require cities over the next seven years to nearly double the percentage of their General Fund dollars they pay to CalPERS; 2. For many cities, pension costs will dramatically increase to unsustainable levels; and 3. The impacts of increasing pension costs as a percentage of General Fund spending will affect cities even more than the state. Employee costs, including police, fire and other municipal services, are a larger proportion of spending for cities STRATEGIES TO ADDRESS RISING PENSION COSTS CITY COUNCIL MINUTES 8 FEBRUARY 5, 2018 wnmbu[e mwa Mlnimitt5alary Cravrh IGfa%=$6501( Ov<rtll: Payment far R 18-19 1%-SEEsp ISsook �retl iapiorc 3w liar-Redrement Cmdnue b fu Ppa Benefib fd new cleat t'mdtlar'Npn-PERS�Ie employeeabdn Op CM�pmsadpn Monitor Fre rax fm Evaluate lmpadsof EPMC impacts to'Califmnia We payment tlm firom Mor wcf acand ended Acluadd PERPManplcwee Payment far R 18-19 dempRnpnics ISsook �retl Cmdnue b fu Ppa Obl4Wm hunt fund 5soa MoM[n effrrizmandad,g sm° payment tlm firom 5nva 30 [a 30 w 20 y years FY 2017-18 ADOPTED GENERAL FUND BUDGET CITY COUNCIL MINUTES 9 FEBRUARY 5, 2018 FY 2017.18 GENERAL FUND BUDGET e �^ $9.3M Budget Gap (b.l.nmd wythe ure of.no-time manias) 5soa $234.2M sm° 24.8M 5nva ;1soa $VD0 Suva a...m fpendlana CITY COUNCIL MINUTES 9 FEBRUARY 5, 2018 FY 2D27-18 ADOPTED GENERAL FOND BUDGES -Alar 1, 2017 234,235,795* PERSlncrease 4,631,32 OCFA I...X284,53 Addition of Combination Inspectors Graffiti Abatement Program Furring in the GF 219%3 HealthInwranm l... a 1,155,60 Alloation for 3rd CAPS Grzm 997,12 Annual Share of Animal Sheher Construction Costs 750,00 Workers' Camp 1%Increase 745,0 Financing ofthe 800 MHz Fina$phase Backbone 3mn e Adopted &Agee prior to. MOU haemes FY 2017-18 ADDITIONAL GENERAL FUND ADJUSTMENTS Additional 6F Adjustments US Marshals' ContracC Revenues 10.2M Expenditures 5.91VI Addition of Combination Inspectors 420K 420K Homeless Services Manager 0 114K Veterinarian Swvlms at SA Zoo 40K 40K MOU INCREASES Salary lmoreases ONLY POASworrl2 0 2.2M Salary Increases ONLY-SEILP 0 360K Salary Increases ONLY-PMA3 0 220K Salary Increases ONLY -POA NonSworn3 0 200K Salary Increases ONLYSAMA3 0 80K Salary Increases ONLY-CASA3 0 52k ' Repmsents projected only} final value of On, short-term 2 year MoramW Contract TBD f Wdkvify ogxt whh Cap on Health Buu Pwrrtums a hf her PEAS Emplowt CumHbNlanfrom SA$ W I2%affettiw 01/0111B 'Partwllyoff,,t wmh Cap on Heahh Inamrec balance to be absorbed w hln edrtlrp budget FY 2017-18 GENERAL FUND BUDGET CATEGORIES Pen $324M,SaY. Prrsrams& Servlees' $563M� 23'i FY 2017-18 Adjusted Genenl Fund Budget: SZ40.7M 34 CITY COUNCIL MINUTES 10 FEBRUARY 5, 2018 FY 2017-18 GENERAL FUND MID -YEAR REPORT REVENUE & EXPENDITURE TRENDS Quarterly Trends Revenues 30910 24% 28% 38% Expenditures 2496 26% 23% 27% GENERAL FUND FY 17-18 2ND QUARTER REVENUES VS. EXPENDITURES GENERAL FUND FY 17-18 2ND QUARTER REVENUE VARIANCE CITY COUNCIL MINUTES 11 FEBRUARY 5, 2018 GENERAL FUND FY 17-18 2ND QUARTER EXPENDITURE COMPARISON Cry F6ie9er S 3.0@,5@ S 1.]41417 tbnCN1 %59&Wt ),155.290 Ck4rdNe Cpuncil G Moms/c Onee t09a,]9d 3%26.160 4141N tlasw F onm,!pgnment 17M," 6`AS90 Flmeue&Mmwmenl5 ,e,f, 5$n,ota 29727% 8.1411um 1.476.130 131!7. PMaaq RecreTbn Seivw A9enry P4fwDp mm 20,056.850 1217%..2]8 9.699, 658 59.095,517 Fw Depehmert 50.417,145 27.90&40.3 Plainln98 Di2UnBA8enry Wtlk Woks Ogenry 10,5'e5,too 6,047,185 4,779.281 Uwml C nmunily �lopmwt Agency W1431 332.557 MTLL GIMM FUD i mmw F 1'N,9M,q N.1% VACANCY REPORT AS DECEMBER 31, 2017 OF eeu Oxryl inveax 5]. NSoryria) DEPARTMEW FY 17 18 BudgeteJ GF Non -GIF T .. I unfunded se.rea=Plante is City Manager's Mke 10 3 0 3 0 City Attorneys OOice 15 2 0 2 0 Clerk o1 the Council 5 1 0 1 0 Community Development 47 1 7 8 0 Finance&ManaBemenl 104 11 4 IS 0 services mfin,mMion Teehrim., 17 0 6 6' 0 pe.mel5ervkes 25 0 3 3 0 Piannin88uming 72 30 0 10 2" Police Depailment 631 102 0 102 55 PKC & Dbm, 74 7 2 9 0 PubGCWork,A,ncy 167 1 40 41 0 TaFAI 1,167 138 Q M 57 'cxmar pblMme ewd wu. "T✓e Cele b)vanwf Lyjleo MObpiw t[Wy PRELIMINARY FY 2018-19 GENERAL FUND BUDGET PRELIMINARY FY 2018-19 GENERAL FUND EXPENDITURE BUDGET FY 12-18 AWUMD GENEML FUND E% P. BUMET 24,735,022 eeu Oxryl inveax 5]. NSoryria) $BS].OX MJULlerylveeID¢ El-l6.4% 3t056'b se.rea=Plante is ia9493 6.4% 4.�oDAs rA&e i�e<ea v9e4®p Increase weoww�arNrerw. utwlr.eenWsrawrarl� ueA947 FylL1SG6NMLNND MWMMAkYM9W.. WDGIT •Wl7Iw [4Wn,e Valw 4JMUMMI4lrMMmgTw^Pinner,-112M •.�- 12 CITY COUNCIL MINUTES 12 FEBRUARY 5, 2018 x PRELIMINARY FY 2018-19 GENERALFUND EXPENDITURE BUDGET 0 tau FY 2018-19 Preliminary General Fwd Exp. Budget: $296.101 KM ,3 M, B% _ PRELIMINARY FY 2018-19 GENERAL FUND PROJECTED REVENUES 80fWey R�almm LMw• uli}e i.K,fW aJnun[.nun, s.smam W. aor,mr_.mas rza.+sa ' WD TmmympaimmodvgemeaeWtaj.YdNheC�mo9a� N PRELIMINARY FY 2018-19 GENERAL FUND PRELIMINARY FY 18-19 GENERAL FUND BUDGET $16.9M Budget Gap $256.101 mm $239.201 moa mon won a,oa mon i a CITY COUNCIL MINUTES 13 FEBRUARY 5, 2018 ea -e— WT uw�ry.umWm.mn pma- m %- ynJu yu�6upe lo�'a u Lv r 80fWey R�almm LMw• uli}e i.K,fW aJnun[.nun, s.smam W. aor,mr_.mas rza.+sa ' WD TmmympaimmodvgemeaeWtaj.YdNheC�mo9a� N PRELIMINARY FY 2018-19 GENERAL FUND PRELIMINARY FY 18-19 GENERAL FUND BUDGET $16.9M Budget Gap $256.101 mm $239.201 moa mon won a,oa mon i a CITY COUNCIL MINUTES 13 FEBRUARY 5, 2018 OTHER POTENTIAL IMPACTS AND CONSIDERATIONS FOR FY 2018-19 wm+em.nxn..m:w.l n,.w xCu.xmngxaraxvxsYpryrnmxmnq 169YtA �na..uxxl. Ivan �nye.e�rser.r..>q unxY.rwxulpeaxmn.aR 9ae.,av aapmY meNa�mbtlxrxurmb.rnnalubli 1®.Y mwibpc� ns.Yw ux pNbn Wmmxwyb WY4plevmni IIPD x� OlxMYWxIlIeInYYRgYb? IRY YunMx..uxFa [xnnulAnaiey nnx'ymsYuxmf .! FIVE-YEAR GENERAL FUND FORECAST DECEMBER 2014 GENERAL FUND FORECAST >a, to avu_ asx w r - va, m FY 16-17 FIVE-YEAR GENERAL FUND FORECAST ,Revenues .—Expenditures 31so em.as.eswr..erar..-...r. ra,,.®ww nr.wne.o wieruw..iewm..rnnuuavn.pyYicwnnxwacmaam .avax aaxe.,nxWexernwssegapraa.x nawrtsarq Nes N1.9 fEW .nxo..rnsevaw+aw.mr..mx..w�svuao-msa.uxowe.� w ma.renanrsvewmr,.�rmeosq Hca Mfg n vxv.Ymye.xernrN9 xomar 1391 1199,! aar xvna D notindud,: wm+em.nxn..m:w.l n,.w xCu.xmngxaraxvxsYpryrnmxmnq 169YtA �na..uxxl. Ivan �nye.e�rser.r..>q unxY.rwxulpeaxmn.aR 9ae.,av aapmY meNa�mbtlxrxurmb.rnnalubli 1®.Y mwibpc� ns.Yw ux pNbn Wmmxwyb WY4plevmni IIPD x� OlxMYWxIlIeInYYRgYb? IRY YunMx..uxFa [xnnulAnaiey nnx'ymsYuxmf .! FIVE-YEAR GENERAL FUND FORECAST DECEMBER 2014 GENERAL FUND FORECAST >a, to avu_ asx w r - va, m FY 16-17 FIVE-YEAR GENERAL FUND FORECAST ,Revenues .—Expenditures 31so �! N1.! 1M3 Nes N1.9 fEW ' Mfg I599 1391 1199,! D notindud,: fb0 }19A - Water Transfer Reduo. - Gram Abatement Transfer - loss of IQ cm ad - Rfa ro PERF gsmuM Ante Announcement MM ln...ln fY l]-98 li�Ll/16 /$219 I I N CITY COUNCIL MINUTES 14 FEBRUARY 5, 2018 GF EXPENDITURE TRENDS GF labor Costs & Authorized Positions 6 yma Ad�wwenibo� ..—�ee,me $129.1 �0 F pma$113.6 $117.6 $104.4 $110.4 �..�� IN ass pea m0 Wa sma 731 760 768 808 825 4NO r ssas rvva$ rvu.0 nss.0 rvve.v Labor Costs 5.5% FY 12-13 vs. FY 16-17 Labor Costs onenose, ienaeanin ar e<M,a wwna +$25M ,ea a sxs nnzRmU.v 5 -YEAR GF REVENUE & EXPENDITURE TRENDS FIVE-YEAR GENERAL FUND FORECAST — FEB. 2018 • Regional Economists are predicting slight economic growth as total GDP growth for the nation will hover around 2.3% in 2018 • Wall Street Journal: "[National]GDP Grew 2.6% at Year End (...]U.S. economy is in unusual territory: not quite booming" • Governor Brown in his Governor's Message as part of the proposed budget warned: `In recent years, I have warned of an inevitable recession lurking in our future, which thankfully has not yet arrived (...] Fiscal restraints are needed more than ever as California approaches the peak of the business cycle." CITY COUNCIL MINUTES 15 FEBRUARY 5, 2018 {2W 231.2 2240 am 2262 5223.0 221.9 2220 32241 233.5 5213.9 S2041 2210 205.7 -_ $200 $297.7 "as' nm F1243 fY 1319 FY 14-16 FY 16-06 rY 140 FYpdt NMae ACuls ACWYs NCuvly yrpvb OYip xnues r�X0000E5 Revenues Expenditures 2% 4% tI a1h�Msa2: Yrta% gowne M�,avaM aLx.�3 '[duan lFe9&dMM Wa•MVOssaue nmfY ]Oi3.v3 FIVE-YEAR GENERAL FUND FORECAST — FEB. 2018 • Regional Economists are predicting slight economic growth as total GDP growth for the nation will hover around 2.3% in 2018 • Wall Street Journal: "[National]GDP Grew 2.6% at Year End (...]U.S. economy is in unusual territory: not quite booming" • Governor Brown in his Governor's Message as part of the proposed budget warned: `In recent years, I have warned of an inevitable recession lurking in our future, which thankfully has not yet arrived (...] Fiscal restraints are needed more than ever as California approaches the peak of the business cycle." CITY COUNCIL MINUTES 15 FEBRUARY 5, 2018 FIVE-YEAR GENERAL FUND FORECAST -FEB. 2018 General Fund Fomank M-rus QUO GOVERNING PRINCIPLES • Be transparent and honest about the problem • Use a comprehensive approach for all funds • Establish a vision, develop a budget that promotes long term sustainability, implement best practices and utilize a combination of cost reductions and revenue increases. • Use a multi-year approach to achieve financial sustainability • Identify core services and focus on funding core services • Provide clear vision and direction from leadership • Engage in a collaborative approach FRAMEWORK FOR BUDGET BALANCING SOLUTIONS • Prepare a long term financial forecast and plan to achieve stability and sustainability • Focus on funding core services • Identify new ways of delivering city services at lower costs • Identify revenue enhancements • Engage with key stakeholders FIVE-YEAR GENERAL FUND FORECAST -FEB. 2018 General Fund Foremd whh prellminary manaptloru W.. Fft sw.. uv nw ora, sv nw dc° naw nar ou 0u nm. r..rrrwammawmr.a„� rMnn-m rmww.reyin num aw naa Mum 6,m"errerthe5MC9; Cawr�'a hpetlm,DMip,rme M !Illpwm lle N CITY COUNCIL MINUTES 16 FEBRUARY 5, 2018 - Rwmues �Ewendihea 5300 2&i2 $2N 215.0 266.9 9260 256.1 $2Q 29!!! 239.2 200.0 7A63 $220 2 _l $loe UN md9m imm.Y ew6m FY M20FV on nna7 1619 ...w.-.rnmaorwr r•r�•aw++mmna.w+.w> roew. eama. . e.sramw w.ro,•x•..w„• p GOVERNING PRINCIPLES • Be transparent and honest about the problem • Use a comprehensive approach for all funds • Establish a vision, develop a budget that promotes long term sustainability, implement best practices and utilize a combination of cost reductions and revenue increases. • Use a multi-year approach to achieve financial sustainability • Identify core services and focus on funding core services • Provide clear vision and direction from leadership • Engage in a collaborative approach FRAMEWORK FOR BUDGET BALANCING SOLUTIONS • Prepare a long term financial forecast and plan to achieve stability and sustainability • Focus on funding core services • Identify new ways of delivering city services at lower costs • Identify revenue enhancements • Engage with key stakeholders FIVE-YEAR GENERAL FUND FORECAST -FEB. 2018 General Fund Foremd whh prellminary manaptloru W.. Fft sw.. uv nw ora, sv nw dc° naw nar ou 0u nm. r..rrrwammawmr.a„� rMnn-m rmww.reyin num aw naa Mum 6,m"errerthe5MC9; Cawr�'a hpetlm,DMip,rme M !Illpwm lle N CITY COUNCIL MINUTES 16 FEBRUARY 5, 2018 Council discussion ensued. Councilmember Sarmiento, expressed need to have full range of options for consideration including voter relief, rate of return, anchor source of revenue. Councilmember Villegas, supports a voter -approved measure. Councilmember Benavides, noted thatjail obligation to expire in 2024, voter measures considered in the past such as Utility User Tax; need to be right by the community and voters; focus on economic development; last option is to have measure on ballot, need to be creative and explore all other options. Councilmember Tinajero, thanked staff for presentation; City has three year plan to ensure payment of obligations; consider revenue options such as green striping for vending trucks, manufacturing and cultivation of cannabis, encouraging economic development with conventions such as upcoming speech and debate; focus on arts and utilizing streetcar project. Councilmember Solorio, suggested offering expedited approval process for major developments as means of revitalizing economy; allow for adequate staffing when approving new measures such as cannabis; need to focus on code enforcement and youth programs; use of technology to streamline and be more transparent; be flexible in requirements such as POST certificate of Park Rangers; consider employee contribution towards increasing PERS costs. Mayor Pro Tem Martinez, staff to focus on building revenue; continue to have honest discussion of budget realities; review recommendations by Management Partners developed some years ago when City dealing with budget shortfalls; focus on manufacturing industry such as the brad city; focus on trades including economic development opportunities for residents to succeed; innovation; make general plan and land use decisions to allow for expansion such as Amazon headquarters; strategies need to be revolutionary. COMMENTS ADJOURNED- 7:25 P.M. Maria D. Huizar, Clerk of the Council CITY COUNCIL MINUTES 17 FEBRUARY 5, 2018