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Supplemental - Robert Goldberg (Closed Session)
Gloria Harper From: Robert Goldberg <rgoldberg@live.com> Sent: Sunday, July 21, 2019 4:44 PM To: Schelly Sustarsic; Thomas Moore; Sandra Massa-Lavitt; Mike Varipapa;Joe Kalmick Cc: Jill Ingram; Gloria Harper; Bruce Bennett; Community Media Corporation;Jeannette Andruss; Elizbeth Kane; Joyce Subject: Closed Session: Recommendation Regarding Civilian Labor Contract Negotiations Attachments: COLA COSTS.xls; Financial Model.V5.1.xls Dear Council Members, I see that you will be having another closed session regarding the civilian labor contracts on Monday afternoon. The following is my third missive on this subject, and now has the benefit of the recently adopted budget, and an update of my Budget Forecasting Model. However, my bottom recommendation to the Council is unchanged. After considering that a 3% COLA in FY 19-20 is essentially a foregone conclusion, I would urge the Council to not commit to any additional COLA's for FY 20-21 and 21-22 at this time for the following reasons: a) My Budget Prediction Model (attached) forecasts a General Fund budget deficit of approximately $340,000 within three years (FY 22-23) if the Council continues to grant annual COLA's in the range of 1-3% indexed to inflation. This deficit results from not only the cost of COLA's in the civilian contracts, but also the presumed COLA's in the police contracts which come up for renewal next year. If the Council currently grants COLA's to civilians in FY 20-21 and 21-22, how will you later be able to say "No" to the police unions? b) There is currently a very high (and unusual) level of uncertainty in FY 19-20 revenue forecasts. Per Ms. Beatley, our current revenue "placeholder" of$4.7 M for Measure BB could be too high or low by $600,000. This is the largest source of uncertainty, but not the only one. Revenue from parking citations is budgeted to rise 37% ($350,000). At $52 per citation (assuming no towing), hitting that extra revenue mark will require writing over 6700 more tickets. Citations are expected to rise with our new implementation of after-hour enforcement, but will this result in 18+ more citations per day? Finally, $200,000 in new revenue is anticipated from the US Marshals inmate contract. At $105/night, this assumes an average of 5.2 inmates per day. With these inmates including immigrant (ICE) detainees, how likely are we to hit $200,000 given the fickleness of federal immigration practices? c) The (presumed) granting of a 3% COLA in FY 19-20 already represents a large cost to residents. Per the attached analysis, over the span of the three-year contract, the total cumulative cost of this 1st year COLA to the General Fund, Tidelands Fund, Water, and Sewer Funds will be over $615,000: Annual Cost of New Contracts vs. FY 18-19 COLA General Fund Tidelands Fund Sewer & Water FY 2019-2020 3% $120,386 $24,346 $60,354 FY 2020-2021 0% $120,386 $24,346 $60,354 FY 2021-2022 0% $120,386 $24,346 $60,354 Total Cost 1 3-Year Cumulative Costs: $361,157 $73,038 $181,061 $615,256 Given these considerations, I think the Council would be on solid labor relation grounds to refuse to make any COLA commitments for FY 20-21 and 21-22. Instead, the Council should offer to "reopen" the negotiations at a future time, preferably after the budget has been adopted in June 2020. At that time, our current revenue uncertainties would be much less,, arid with the budget surplus for FY 20-21 established, the Council could make a more fiscally-responsible decision regarding how much of this surplus and future surpluses should be used for salary rai:5es. As always, thank you kr-your service and consideration, Robert Goldberg 2 VI 0IA CIO O LA oN * UN 0 cr Lii(V U N 14. N 0tD H00 p I— � 0 I LLL L L Q) 0) a) 0) rts a--+ > Ln m m m O 01 > m N CO m 0 lr1 O D1 3 m U `� °� O O O `'' °� O r i N M ` ' oZS N 1� `;{ o2S O (� OO L lD lD lD 00 GD '- 0 CO O am CO i- lD O d' 0 OO i UD `� 3 �n- }, th 1/1 } t/1 V1 } Cl/ u.. CI) u_ a u aJ V) V1 cn to > > > > N U v, N U1:3 U73 U V "a C C C C O s._ �i UD lD lD 00 +'- �i to co 00 ++ ti LC) O +L �i LD C r - m m C to co `--1 C d m (N C O 3 m m m O O ul m N m O m N up - Ou. m (6 U C M U 7 d1 N _ 00 U C �Y r I 00 co NI ci- Ln N U cs Er, v v v a) v yr 0) v ro NI Z a z -a in- z -a z -a c13 o ~ o ~ o ~ o i= N VI VI N U 13 U lD LO LU N 3 z LID Gt •� rl LG' N u'1 N C LO C CO 00 OO to LL 00 a1 N O = u_ CO O Ql 00 CO C _ m m m rI C m N lD M C _ m N lD N C m C (0 O O O a-1 C (0 O N N (0 O Q1 Co O Q a� 1 CNI NI M Q a) to o Q a`, oN rNi UD Q a N ai v)- v)- I in � in v I Q l7 0 0 0 J O `. Q `a Q N a o o O N a o o O N J o 0 o O N J o U N O m O o U N O m r-I r-i U N O m N N U N 0 m 4+— U a) U 4J !-4 I U a) U 0 AN ? AN ? ANYY N (n W ON N N W ON N N Co W ON N N Co ON •— O co 0 3 O O O 3 O o 0 3 O (n N N N N N N N N N N C N N N N N N D1 O r-i i Ol O r i 3 01 O ri i ( 3 N o 0 o i N o 0 0 i N o 0 0 U N O N N N fp N N N Co N N N Co N C MC c+1 C MC U o 00 u 0 u u a o p e-1 N M 0 I 0 I 0 I a) L (1} (9 I/1 rel s- 1..(..) (n U N v -c 1 ri Q N 'n' E ra ro ar ,-1 L - ria v rt w • rV d r` to top > O m U1 H N c 01 1/1 Q > v ✓ f., p' U. v N W 1- •- Q- -' .-I folas O v to • )- to V) 4-+ = 41 a- V a (o m "- E E icy, '.. o vc c.,3 a) to Z 'L to a 0 as as oi 1ti Cr o is •n- v) w o L ,--I c (l'1 L .0 N m C(E E (O O tt( N CID ti >.. .-t r_, 0 v (o ,--1-I tt) ,-1 • _ L Q cO 1!1 N > CV 'Zr N. d . o r',1 (YI N C ++ as t!F 11 -V _c c o •GD o >. CJ 0 (1) (3 v > u C U .� Cln 41 48 Q) N C ++ Q. m KI V Eto v a) N a ri > 'n 03 _c o, rN (N! tC i CO O 0 = (133 0 `-I N IN E (6 4, c 'O v) L c O N �; (n v O ro O r1 �. v E E i' N (N (g W N 4J >- r• a) c E C • 1.L 1i >• co vt co ,_ m g a (s o) U co o v N v c� - n Z3 .0 v 0 7 1) U 7 N o rp N > C x c) c o c Model Output: Projected General Fund Budget Surpluses (Deficits) FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Revenues $ 36,317,000 $ 36,851,000 $ 37,430,000 $ 38,060,000 Expenditures $ 35,512,000 $ 36,663,000 $ 37,770,000 $ 38,660,000 Surplus (Deficit) $ 805,000 $ 188,000 $ (340,000) $ (600,000) Projected Annual Changes 2020-21 2021-22 2022-23 2023-24 Local Inflation 2.0% 2.3% 2.4% 2.4% Revenues: Property Tax 3.2% 2.6% 2.9% 3.1% Sales and Use Tax 1.0% 0.9% 0.9% 0.9% Transactions Tax(BB) 1.0% 1.0% 1.0% 1.0% Utility Users'Tax 0.0% 0.0% 0.0% 0.0% Transit Occupancy Tax 0.0% 0.0% 0.0% 0.0% Franchise Fees 1.8% 1.8% 1.8% 1.8% Other Taxes(Oil Barrel Tax) 0.0% 0.0% 0.0% 0.0% Licenses and Permits 2.0% 2.0% 2.0% 2.0% Intergovernmental 0.0% 0.0% 0.0% 0.0% Charges for Services 1.8% 2.1% 2.2% 2.2% Fines and Forfeitures 0.0% 0.0% 0.0% 0.0% Use of Money&Property 0.5% 0.5% 0.5% 0.5% Other Revenue 0.0% 0.0% 0.0% 0.0% Transfers In 0.0% 0.0% 0.0% 0.0% Total Revenues 1.7% 1.5% 1.6% 1.7% Expenditures: Full-Time Employee Pay 2.5% 2.5% 2.6% 2.6% O.C.Fire Authority 4.5% 4.5% 4.5% 4.5% Pensions(CaIPERS) 12.0% 9.0% 6.9% 4.1% Contract Pro Services 2.0% 2.3% 2.4% 2.4% Liability Insurance 6.0% 6.0% 5.0% 4.0% Refuse Services 1.6% 1.8% 1.9% 1.9% Medical Insurance 3.0% 3.4% 2.4% 2.4% Tidelands Beach(Transfer) 0.0% 0.0% 0.0% 0.0% West Comm(911 Center) 3.3% 3.3% 3.3% 2.3% Information Systems 0.0% 0.0% 0.0% 0.0% Retiree Medical Insurance 3.9% 1.7% 4.3% 2.0% Part-Time Employee Pay 4.0% 4.0% 2.4% 2.4% Intergovernmental 0.0% 0.0% 0.0% 0.0% Fire Station Bond -3.8% -3.3% -3.4% -27.3% Legal Services 0.0% 0.0% 0.0% 0.0% All Other Expenditures 0.0% 0.0% 0.0% 0.0% Total Expenditures 3.6% 3.2% 3.0% 2.4% Model 5.1 Revised 7/21/19 I 4 I 4 • : I I • V) •U N o 00 0 o. 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O F u LL w „a v w Q rw o D 3F a O c 0 0 oi 0 i 0 i i Projection of General Fund Revenue Fiscal Year: 2016-17 Actual* 2017-18 Actual** Property Taxes: Secured, Unsecured, & Transfers $7,386,537 $7,793,706 Property Tax: In Lieu VLF $2,473,389 $2,598,100 Property Tax: All others $704,285 $788,390 Total Property Tax $10,564,211 $11,180,196 Sales and Use Tax $4,110,689 $4,024,949 Public Safety Sales Tax X268,359 $278,670 Total Sales and Use Tax $4,379,048 $4,303,619 Transactions Tax (BB) Not Applicable Not Applicable UUT $4,177,713 $4,186,554 Transit Occupancy Tax $1,693,515 $1,666,996 Franchise Fees $1,016,939 $1,059,580 Other Taxes $190,510 $163,277 Licenses and Permits $1,300,232 $1,527,849 InterGovt: Inmate Fees -$12,245 $0 InterGovt: All other $129,581 $212,258 Total Intergovernmental $117,336 $212,258 Charges for Services: Refuse $1,249,612 $1,257,688 Charges for Services: Others $1,580,056 $1,662,929 Total Charges for Services $2,829,668 $2,920,617 Fines and Forfeitures $1,103,093 $1,089,514 Use of Money & Property $810,907 $710,357 Other Revenue $676,624 $762,038 Transfers In $739,638 $833,700 Total Revenues $29,599,434 $30,616,555 *Per FY 1849 Budget, pages 19-21 **Per FY 19-20 Budget, pages 19-21 Revised 7/14/19 2018-19 2019-20 Estimated** Projected** 2020-21 Forecast 2021-22 Forecast 2022-23 Forecast S8,050,000 $8,407,700 $8,702,064 $8,942,936 $9,213,414 $2,693,000 $2,810,000 $2,902,579 $2,982,980 $3,073,365 $748,000 $723,000 $723,000 $723,000 $723,000 $11,491,000 $11,940,700 $12,327,643 $12,648,916 $13,009,779 $4,250,000 $4,200,000 $4,243,437 $4,285,871 $4,328,730 $270,000 $270,000 $270,000 $270,000 $270,000 $4,520,000 $4,470,000 $4,513,437 $4,555,871 $4,598,730 $900,000 $4,712,500 $4,759,625 $4,807,221 $4,855,293 $4,175,000 $4,175,000 $4,175,000 $4,175,000 $4,175,000 $1,600,000 $1,585,000 $1,585,000 $1,585,000 $1,585,000 $1,078,800 $1,073,800 $1,093,128 $1,112,805 $1,132,835 $212,100 $214,300 $218,586 $222,958 $227,417 $1,531,100 $1,462,100 $1,491,342 $1,521,169 $1,551,592 $1,500 $203,000 $203,000 $203,000 $203,000 $141,800 $104,300 $104,300 $104,300 $104,300 $143,300 $307,300 $307,300 $307,300 $307,300 $1,282,000 $1,320,500 $1,341,543 $1,366,153 $1,391,946 51,750,500 $1,762,900 $1,798,017 $1,839,245 $1,882,652 53,032,500 $3,083,400 $3,139,560 $3,205,398 $3,274,597 $1,055,500 $1,410,500 $1,410,500 $1,410,500 $1,410,500 $723,400 $723,400 $727,017 $730,652 $734,305 $456,700 $453,400 $453,400 $453,400 $453,400 $132,700 $115,000 $115,000 $115,000 $115,000 $31,052,100 $35,726,400 $36,316,539 $36,851,190 $37,430,750 2023-24 Forecast Comments $9,517,737 FY 20-21 and beyond from HdL (PRA 19-77, 2/7/19) $3,174,786 FY 20-21 and beyond from HdL (PRA 19-77, 2/7/19). $723,000 $13,415,523 $4,372,017 FY 20-21 Figure from HdL (PRA 19-233) $270,000 $4,642,017 $4,903,846 $4,175,000 $1,585,000 $1,153,226 $231,965 Excise and Barrel Taxes $1,582,624 $203,000 Includes US Marshals jail contract effective 3/19. Unknown why negative income in FY 16-17 $104,300 $307,300 $1,418,226 $1,927,082 FY 16-17 excludes "Inmate Fee from other Agencies." Moved to Intergovernmental $3,345,308 $1,410,500 Does not include any unrealized gain/loss on $737,977 investiments $453,400 $115,000 $38,058,687 C 0 g ,I E a ! raj W yy c a s 32 E x s m ^a T. w a 3 d e 8 ..! a ; iu Pv o2 . 'C ^ ry o m Y ' • t.:71 • v .`7 c o n $ W U 0 s o 2 f. g c 2 q ^ • c R O£ c °' $ o NE o .M 0 2 n. 0 t E o 0. a 2 c ; x.Q c m a > 4 $w ;i O 8 "-4 i s &?4 a 0d `o LL T f!..'. ? h • Z ? A i Y o C S O m .sta, mom £ Se 0 $ 'o ' :° 8 m. n a t ~ x n E £tri 2 fc c 2 t 4a m j ! 9 oE v° E o N a :'E r : 8 a s s p € ,1 c mNO m t+ m m M" 4 E E •§ O u E a n`sn t y ". . qE g 2 LL 5 0 E C "pp 2 a i a N 4.2 •c $ - ; ~ • • p r a a n a 7. _ ads 4 Y 8 Q i7 a € e Q a 3 0 c,2 y $ $$ b m • .m. u y sial-g J1 1103 ° a : � oa � a o ' ; 3 a t : m u IX c: s a ESA w$ �C£ $ o o . 5 Y $ g c3 m m $$ g ,-:< . v; m 0 0 o m 8 8 3 .3 y m m r O `° Q p 8 N Nny . . N 4 a O A popp l oi cd b O ci a 0 n V 52. y 4t N N U1 4 N N N all N N N N N N N Nj 2 s m m° m mr an •i w ,8 m 8 n 8 " 8 r`. m § § § o ay a N N N N N N N V N N N N • 'i`�°• y •m. s Y r0vp� p p p p 8 S -a s N N N m 1� P m 8 t° O • . O S O O M y g N C.0 -.C} O r .. N N N IN n CC•C 11m.� IN aN N '''' N 8 E N N N SO N °I T h :p N N y G 5 N N N N N y N N y N N O IN N C N 8 N Q 5� QQ s9 T.: i r4+ 4 ti o o m. n 'n 8 o 8 .0. 2 § 2 § S a t] �0. �0° e $cei m m n q 8 ry ry m4. m a n umi n `$4. '0^ AlN 5 p um. .: m m E$ y A N y N N y N y N N y N N N N N NM o O N 4 • ti4 8 8 8 8 EV Z ij q s cd s s 8 8 a s 8 s g i $_ C N N Y. N m h "nf N H T N N . N q 0 y y y a y g - • L W y y N • O FT w ob= 8 m 8 8 8 8 8 o s 8 s 8 8 8 8 8 8 = ; m 41 8 c m r, A . ap m N g 1 §' u .8 n • N 8 t v H N y N N N y N 0 ' C j N m W 8 8 8 §_ g § 8 8 § 8 8 § 8 8 § 8 8 8 ! o v .°i, v m 0 .-, .0 o 07 of o a ri o $ a 'S c• °c 'a c vmi v .! h $ zto g • '� ru at c ^ . N N y . N N N N . an N ul N N 4 j n s n V = N wa_•0 E a ` w an o Q 4 '_° M § §' g § 8 8 8 8 S 8 8 8 $ 8 a B. x 2 r a n om c $ n N $ a �'.' ''' g vi s ^ '06- N N N N N y N y �A N 'O1ll N ry 1 m L O p N N y N ` ° 0 • y N C E O c M c c u d s8' O • E e ; Ya g'. $ u `o a '� n v m 8 v O s z _ g L_ o <a u 0 c = Cl. a E. 3 e A ° '_ a « _ n ." y i c m x ua o N TzgE fa a u F .3 " a A m .. e .4 o z E a u g i r - n ~ .2 " a 2 2 E c m° o g^o Y Ed c o a $ .a. w x c E .9 f g e 3 O ,, d a t N O C 3 LL C 3 m N a p O ( 8 8 3 z w 1'-- 3 5 a i - i a g : S ' Projection of Pension-Related Costs for All Pensio 2019-20 2020-21 2021-22 Safety Plan Pensionable Salary & Benefits $4,931,800 $5,051,888 $5,175,132 Employer's Normal Cost Rate 20.654% 22.100% 22.100% Employer's Normal Cost $1,018,614 $1,116,467 $1,143,704 Plan's Payment of Unfunded Accrued Liability $1,389,223 $1,580,000 $1,805,000 Safety Pension Costs $2,407,837 $2,696,467 $2,948,704 PEPRA Safety Plan Reported Payroll $200,400 $205,486 $210,712 Employer's Normal Cost Rate 13.786% 13.900% 13.900% Employer's Normal Cost $27,627 $28,563 $29,289 Plan's Payment of Unfunded Accrued Liability $1,914 $2,100 $2,300 Safety Pension Costs $29,541 $30,663 $31,589 Miscellaneous Plan Pensionable Salary & $3,304,857 $3,372,802 $3,442,201 Benefits Employer's Normal Cost Rate 10.869% 11.600% 11.600% Employer's Normal Cost $359,192 $391,245 $399,295 Plan's Payment of Unfunded Accrued Liability $797,110 $907,000 $1,041,000 Misc Pension Costs $1,156,302 $1,298,245 $1,440,295 Miscellaneous PEPRA Plan Pensionable Salary & Benefits $627,843 $643,779 $660,150 Employer's Normal Cost Rate 7.072% 7.600% 7.600% Employer's Normal Cost $44,401 $48,927 $50,171 I I I I U Plan's Payment of Unfunded Accrued Liability $2,427 $2,900 $3,500 Misc Pension Costs $46,828 $51,827 $53,671 Fire Plan (Current Retirees) Payment of Unfunded Accrued Liability $322,000 $361,000 $361,000 Total GF CaIPERS Estimate $3,915,680 $4,386,375 $4,781,589 Projected Annual Increase($$$) $470,695 $395,214 Projected Annual Increase(PERCENT) 12.0% 9.0% *PEPRA Other Safety Plan consists of just 1 Marine Safety Officer as of June 2017. Revised 9/15/18 hn Plans except PE 2022-23 2023-24 $5,304,704 $5,437,513 22.100% 22.100% $1,172,340 $1,201,690 $1,989,000 $2,100,000 $3,161,340 $3,301,690 $216,211 13.900% $30,083 $221,854 13.900% $30,838 $2,500 $2,700 $32,553 $33,538 $3,514,813 $3,588,870 11.600% 11.600% $407,718 $416,309 $1,151,000 $1,210,000 $1,558,718 $1,626,309 $677,380 $695,060 7.600% 7.600% $51,481 $52,825 $4,100 $4,700 $55,581 $57,525 $361,000 $361,000 $5,113,611 $5,322,537 $332,023 $208,926 6.9% 4.1% :PRA Other Safety* Comments FY 19-20 = FY 19-20 Police Field Services + EOC (See "19-20 GF" tab), then reduced by the payroll amount calculated for the PEPRA Safety Plan (line 9) Rates from August 2018 CaIPERS Actuarial Valuation Report (Safety Plan) after reduction by the 3% share paid for by "classic" Safety employees. Cost = Normal Cost Rate X Pensionable Salary & Benefits From August 2018 CaIPERS Actuarial Valuation Report, Safety Plan Estimated current payroll based on payroll reported to CaIPERS as of 6/30/17 (p 18 of August 2018 Report) increased by the three pay raises since then. Rates from August 2018 CaIPERS Actuarial Valuation Report (PEPRA Safety Plan) Cost = Normal Cost Rate X Pensionable Salary & Benefits From August 2018 CaIPERS Actuarial Valuation Report, PEPRA Safety Plan FY 19-20 = FY 19-20 Total minus Police Field Services, minus EOC (See "19-20 GF" tab), minus the payroll amount calculated for the PEPRA Miscellaneous Plan (below, line 21) Rates from August 2018 CaIPERS Actuarial Valuation Report (Miscellaneous Plan) Cost = Normal Cost Rate X Pensionable Salary & Benefits From August 2018 CaIPERS Actuarial Valuation Report, Miscellaneous Plan Estimated current payroll based on payroll reported to CaIPERS as of 6/30/17 (p 18 of August 2018 Report) increased by the three pay raises since then. Rates from August 2018 CaIPERS Actuarial Valuation Report (PEPRA Miscellaneous Plan) Cost = Normal Cost Rate X Pensionable Salary & Benefits From August 2018 CaIPERS Actuarial Valuation Report, PEPRA Miscellaneous Plan FY 19-20 figure from FY 19-20 Budget. Future years from CaIPERS Annual Valuation Report as of 6/30/17 Flex Dollar Increases 4.65% Increase Civilians Jan-19 Jan-20 EE only $ 862.11 $ 902.20 EE+1 coverage $ 1,332.24 $ 1,394.19 EE+Family coverage $ 1,722.83 $ 1,802.94 Police Civilians Jan-19 Jan-20 EE only $ 1,050.00 $ 1,050.00 EE+1 coverage $ 1,350.00 $ 1,350.00 EE+Family coverage $ 1,600.00 $ 1,600.00 f C Q.) } 0 N LL Y O c 7 •c N YO OC N a Y 1 W CO `-' 0- V o0 d y Li u) a) N R -a Z c Z O X 0 4, T aJ t� N a' to al O } m - t1 110 K W al IN Y ai .�y-I •C al p 0 N C N N aC) Lt.. Y .- N O E C N O E Y } a--1 Q G. N} E C 4' O a1 7 p O >- 7 + o ((00 4 w p '3p C W o U Y Y Up Y O 0 aJ h E CO m C- CL a) + o_ cocN N ` y 2 L 7 in U 7 7 7 L Y Y Y 'C. N +"� L- Y . 0 U a1 ? T 3 O JO 7 T OA C 4n al d Ozz 0 > C. Q aJ 0. GC - N a! O O N a) tea) L co N W C 4i OC N N U \ L d N c Z Y •�+ al cu Y CL C NN.\ O c L C t al C U N X 7 N N C O y ~' �1 U mu, 7 a) a cn LA 0 .-i Y U Y 0 OU N 0. O N u C (0 CO -d i/) ("0 •0 N C c (0 Y C N To L Y E U U (0 E (9 0 E E -a a C O C ccinmEN 07 a) en m c v a`1 ozg ' a O fV (V C .0 C - Q < t/1.CoY0 O N m V' 0 F- 1— 0 O a--I VI 00 N 0 0 N ^ Nkr) N O 0 N a) 0000 V1 01 cn N 0 N 0e0 co up 00 O r4 t-I 0 coin N 7..,-, O ''( t>0 0 0 O a) N 1� ei en O N 0- N M 01 O Ol in 0 N r•1 t .--( O1 M 41 N N M � 0; CL. } 'zt0 `� ir) M ri a) N co T LL L? N •0 .4.n. in. N L? N 'Vy to a` CU Y Y 41 tO N N to P(1 ^rsl tT t\ O .i O N DD W O tT O U O m M '"� V1 N O a tTtT l� O 00 to d' C N E 00 � ,�-I 0x11 N N OO N co o0 N N 0 N (Lo U - U -i E .4 O1 sn c- m . , m 00 0 4 � in 1S Cl.) >- u d O H 0 to LL a + 7 C C c CD a) ca, E a1 ,� oc x C [Q U(0 W v, (o 4+ E L1 o LE F- ol cc to Z NJ I v el 11 _ CO 0) Y .�, 0cu C d aci (0 o _^�' o alai ›.- 4) .. Y N m '- a. W J 's3 `) Q to 2 m Q• a °\° v > o 0 0 4-. a) a v) X 00 43 c E 0. o c _ Z_ > (Ya U a)m W cc O u i- N Q LL u U u to O o: 1 I Retiree Medical Payments* Actuarially Determined Recommended City Contribution (page 18, Implicit Subsidy *** Payments Fiscal Year Column "d") (page 16)** 2020-21 $907,194 $140,074 $767,120 2021-22 $933,276 $152,795 $780,481 2022-23 $960,108 $146,153 $813,955 2023--24 $987,711 $157,640 $830,071 Revised 7/13/19 *Based on "GASB 75 OPEB Valuation Report as of June 30,2017" by Precision Actuarial Inc.,dated July 3,2018(PRA 18-292) **This is an accounting credit to the City,so is deducted from the"Actuarially Determined Contribution"to yield the recommended payment amount. ***Reimbursements to Retirees for their health insurance premiums&payments to Retiree Benefit Trust for unfunded liability.All figures from Precision study. Savings .from Delayed filling of Positions in FY 19-20 Adopted Budget with Delayed Hiring Proposed Bu Finance City • City Manager (017) PW Admin Manager Full-Time Salary $ 245,300 $ 472,700 $ 142,900 $ 260,600 Part-Time Salary $ 31,800 $ - $ 22,800 $ 57,800 Medical Insurance $ 18,100 $ 42,500 $ 20,900 $ 22,100 Revised 7/15/19 idget with Active Hiring Finance (017) PW Admin Savings $ 479,100 $ 148,500 $ 27,300 $ - $ 22,800 $ 26,000 $ 45,000 $ 22,400 $ 8,000 Proposed 19-20 General Fund Budget (not including Sew Pension Plan: Miscellaneous Pensionable Salary& City Human Finance (017 Police Other Pay City Council Manager City Clerk Resources &019) Support Full-Time Salary $ 245,300 $ 169,300 $ 92,800 $ 472,700 $ 515,100 Temporary Special Pay Holiday Pay Comptime Buy/Payout 0 $ 300 Vacation Buy/Payout $ 14,600 $ - $ 4,200 $ 5,300 $ 10,200 Total Pensionable Salary& Other Pay $ 259,900 $ 169,300 $ 97,000 $ 478,000 $ 525,600 Overtime 0 0 0 0 $ 7,000 -otal Salary&Other Salary- linked costs $ 259,900 $ 169,300 $ 97,000 $ 478,000 $ 532,600 Cal/PERS $ 66,700 $ 26,600 $ 25,200 $ 134,700 $ 114,100 Medical Insurance $ 18,100 $ 31,400 $ 5,900 $ 42,500 $ 77,800 Medicare $ 400 $ 3,100 $ 1,500 $ 7,300 $ 9,400 Part-time Salary $ 31,800 $ 38,500 $ - $ - $ 89,100 Intergovernmental $ 239,400 $ 108,600 Contract Professional $ 10,000 $ 35,000 $ 13,500 $ 62,000 $ 260,100 $ 72,200 Legal Miscellaneous Pensiion Refuse (retainer only Expenditures OCFA Bond Services ) West Comm Info System! $ 5,768,700 $3,000 $1,184,500 $ 246,000 $ 862,600 $ 793,100 ►er, Water, or Tidelands Funds) Bld & Police Parking Neighbor PW-Storm PW-Street Detention Enforcement Planning Services PW Admin Drains Maint $ 562,500 $ 239,100 $ 246,600 $ 444,500 $ 142,900 $ 156,600 $ 230,000 9700 1400 $ 3,400 $ - $ - $ - $ - $ - $ - $ 4,100 $ - 0 0 0 0 0 $ 579,700 $ 240,500 $ 246,600 $ 444,500 $ 142,900 $ 156,600 $ 230,000 $ 20,000 $ 5,000 500 9000 5000 $ 599,700 $ 245,500 $ 246,600 $ 444,500 $ 143,400 $ 165,600 $ 235,000 $ 159,800 $ 70,100 $ 67,000 $ 120,800 $ 21,400 $ 40,700 $ 51,600 $ 105,200 $ 31,300 $ 38,700 $ 63,800 $ 20,900 $ 27,400 $ 42,700 $ 9,000 $ 5,500 $ 3,800 $ 6,700 $ 2,500 $ 2,600 $ 4,100 $ - $ 121,000 $ 7,200 $ - $ 22,800 $ 9,000 $ 39,000 $ 240,000 $ 55,000 $ 40,000 $ 126,100 $ 135,000 $ 20,000 $ 35,000 $ 131,500 $ 760,000 Fuel & Misc Retiree Med Insurance- Risk vehicle Fire Station Contribution Management expense Bond $ 738,200 $ 1,944,100 $ 221,000 $ 491,200 I I I Safety Park& Sports& Vehicle Landscape Rec Tennis Police Field Maint Bid Maint Sry Rec Admin Program Center Aquatics Services $ 102,700 $ 96,200 $ 54,800 $ 108,400 $ - $ - $ - $ 4,600,000 $ 15,000 $ $ - $ 320,000 0 0 $ 14,100 --- - $ 43,700 $ 102,700 $ 96,200 $ 54,800 $ 108,400 $ 4,992,800 500 6000 2000 300 $ 305,000 $ 103,200 $ 102,200 $ 56,800 $ 108,700 $ - $ - $ - $ 5,297,800 $ 27,900 $ 24,000 $ 14,900 $ 17,100 $ 2,118,800 $ 24,600 $ 13,600 $ 5,300 $ 17,200 $ 2,300 $ 6,900 $ 498,500 $ 1,500 $ 1,500 $ 900 $ 2,600 $ 300 $ 1,500 $ 1,400 $ 80,600 $ 52,800 $ - $ 500 $ 39,700 $ 18,000 $ 118,200 $ 93,400 12000 `.$ 14,000 $ 1,000 $ 270,000 $ 175,000 $ 11,500 $ 175,000 $ 82,100 $ 35,000 $ - FY 19-20 Police EOC Fire Totals Police Only $ 126,500 $ 8,606,000 Salary $ - $ 15,000 Temporary Special Pay $ 8,600 $ 339,700 Holiday Pay $ 4,300 $ 22,100 Comptime Buy/Payout $ 82,100 Vacation Buy/Payout Total Pensionable Salary& $ 139,400 $ 9,064,900 Other Pay $ 1,000 $ 361,300 Overtime Total FTSalary&Other Salary- $ 140,400 $ 9,426,200 linked costs $ 5,438,200 Police Only $ 62,600 $ 322,000 $ 3,486,000 Cal/PERS $ 8,300 $ 1,082,400 Medical Insurance $2,200 $ 148,400 Medicare $ - 0 $ 693,000 Part-time Salary $ 658,000 Intergovernmental $ 9,500 $ 220,300 $ 2,678,800 Contract Professional Sr. Bus Civilians Only $ 3,988,000 Civilians Only dill I k !E v- f k ! 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R 8 0 § 8 s 88 § $ ar g8 8 R m 8`^ o -g PN N N an N N N N N N ° 8 m 38 E • 8 3 3$ 3 • 1 t 1i , g g- 1 t N i o W N N N N N N N N N N N C h $ ; 88888 8 § A 8 88 § 18 QJ N ti a m "m, N $ $m a c a d EQ : .444.4 .4055/5 N N N N tef MO CC g ._ § Vg 8 § $ § m g !'!; EC W 7-I b rO b p b6 N N N N N hh N - C s 8 § § 8§ $ E § roe ' N N N N h N N N N 3 N , g8 8 8 $ 8 88 $ " $ oE 8^ m w ".� .. n 'i 8 N x p tQ) N N N N N N N N = 8 8 § 8 88 § $ $ o o 5. 4 r� " r4 d 4- �N h h N id h h 1 h (isv ; ag § 8 8 § Ug § § 98 i N m N a "l S N 3M m € � =oa c n N r m 2 5 N N h N N N N h y N C • q Z o a 2 LL N .G a a n s- N N V C .. m i C E Q) 5 .. sa - c I r td S 8 r g g arn38 .1 r a a es iF & >- 1�7 "a € ai ESB o1 E E « sg LL ig2Xi33 i bll , ii a t5 ; CPI-All Urban Consumers (Current Series) Original Data Value Series CUURA421SAO,CUUSA421SA0 Not Seasonally Adjusted Series All items in Los Angeles-Riverside-Orange County, CA, Title: all urban consumers Area: Los Angeles-Riverside-Orange County, CA Year Jan Feb Mar Apr May Jun Jul 2007 212.584 214.760 216.500 217.845 218.596 217.273 217.454 2008 220.918 221.431 223.606 224.625 226.651 229.033 229.886 2009 220.719 221.439 221.376 221.693 222.522 223.906 224.010 2010 224.610 224.620 225.483 225.916 226.438 225.877 225.991 2011 228.652 229.729 232.241 233.319 233.367 232.328 231.303 2012 233.441 234.537 236.941 236.866 237.032 236.025 235.776 2013 238.015 239.753 239.995 239.043 239.346 239.223 238.920 2014 239.857 241.059 242.491 242.437 243.362 243.528 243.727 2015 239.724 241.297 243.738 243.569 246.093 245.459 247.066 2016 247.155 247.113 247.873 248.368 249.554 249.789 249.784 2017 252.373 253.815 254.525 254.971 255.674 255.275 256.023 2018 261.235 263.012 264.158 265.095 266.148 265.522 266.007 2019 269.468 269.608 271.311 273.945 274.479 274.380 I I I I I I I I y I I U U y I U U • Aug Seep Oct Nov Dec Apr-Apr Dec-Dec 217.330 2.17.697 218.696 219.943 219.373 228.484 227.449 226.159 222.229 219.620 3.1% 0.11% 224.507 225.226 225.264 224.317 223.643 -1.3% 1.83% 226.373 226.048 226.794 225.941 226.639 1.9% 1.34% 231.833 233.022 233.049 232.731 231.567 3.3% 2.17% 237.222 238.104 240.111 237.675 236.042 1.5% 1.93% 239.219 239.611 239.940 238.677 238.742 0.9% 1.14% 243.556 243.623 2.43.341 241.753 240.475 1.4% C.73% 246.328 245.431 245.812 245.711 245.357 0.5% 2.03% 249.700 250.145 251.098 250.185 250.189 2.0% 1.97% 256.739 :257.890 258.883 259.135 259.220 2.7% 3.61% 266.665 268.032 269.482. 268.56 267.631 4.0% 3.24% 3.3% 1.83% Means 0.36% Difference Federal Reserve Economic Data Link: https://fred.stlouisfed.org Help: https://fred.stlouisfed.org/help-faq Economic Research Division Federal Reserve Bank of St. Louis PCEPI Personal Consumption Expenditures: Chain-type Price Index, Index 2012=100, Monthly Dec-Dec 2007-12-01 92.855 0.31% 2008-12-01 93.139 2.19% 2009-12-01 95.175 1.35% 2010-12-01 96.456 2.60% 2011-12-01 98.965 1.65% 2012-12-01 100.595 1.46% 2013-12-01 102.065 0.84% 2014-12-01 102.923 0.41% 2015-12-01 103.350 1.74% 2016-12-01 105.153 1.81% 2017-12-01 107.056 1.76% 2018-12-01 108.938 1.47% I I I I I I , Seasonally Ad,Jstec l i GeneraLiability Administration Cost of Hiring One Police Officer in July 2019 Hire Date July Hire Date July Fiscal Year 2018* 2019 2020-21 2021-22 2022-23 Salaries** $89,172 $91,435 $98,448 $106,068 $114,279 Holiday Pay** $6,343 $6,504 $7,003 $7,545 $8,129 CaIPERS $19,728 $21,644 $23,305 $25,109 $27,052 Uniforms $1,000 $1,000 $1,000 $1,000 $1,000 Medicare** $1,400 $1,435 $1,545 $1,665 $1,794 Medical Insurance $16,200 $16,200 $16,757 $17,153 $17,557 Life/LTD $1,047 $1,047 $1,047 $1,047 $1,047 Total Cost $134,888 $139,265 $149,104 $159,586 $170,857 *The figures listed above for Hire Date July 2018 are from Public Record Request#18-263 except for City's CaIPERS figure included the payment of the City's "amortized bases" for accrued unfunded liab of salary. However, hiring a new employee does not increase this liability, or the annual payment to sub-cost, since it is not calculated by CaIPERS as a percent of salary. Therefore, the CaIPERS figure ab just the portion of our CaIPERS payment that is calculated as a percent of salary, i.e., the "Employer Rate" of 19.346% of pensionable salary. It was assumed that new employees would be a "classical" CT CaIPERS and not post-PEPRA. If this is not the case, pension costs would be less than above. **The City salary figures assume the employee is hired at Step 1. Per the Police employment contrac Step 2 would occur after 6 months of employment. Presumably, this Step increase is included in the figures for first year costs. In subsequent years, salary and salary-linked costs (holiday pay & medicar one Step which is 5% plus any COLA. See chart below. 5% Step Increases: Step 1 to 2 Step 2 to 3 Step 3 to 4 Step 4 to 5 1st Year of Employment 2nd Year of Employment 3rd Year of Employment 4th Year of Employment Revised 9/24/18 Cumulative Cost of One Officer Hires! 7/19 $618,812 CaIPERS. The ility at over 20% 2aIPERS for this ove is based on Normal Cost iembers of t, promotion to City's salary e) will increase L.y Year-End FY 18-19 Year-End FY 18-19 Year-End FY 22-23 New Reserve Policy* Projected Amounts in Policy Target Policy Target Amounts Adopted Budget^ Amounts 1)Maintain an Unassigned Fund Balance equal to 20%of operating expenses(see below)for economic uncertainties, #VALUEI #VALUE! #VALUEI local disasters,unseen opertaing or capital needs.If balance is below policy,plan must be developed to restore Policy goal. 2)Disaster/Hazard Mitigation Reserve at 10%of operating #VALUE! #VALUEI #VALUEI expenses 3)Fiscal Policy Reserve equal to 25%of operating expenditures plus recent annual CPI**to mitigate financial and service delivery risk due to unexpected revenue shortfalls or (*VALUEI #VALUEI *VALUE! unancipated critical expenditures.If balance is below policy, plan must be developed to restore Policy goal. 4)Maintain a Vehicle&Equipment Replacement Reserve(VRF) $500,000 $780,000 $500,000 at a minimum of$500,000 5)Maintain a Technology Equipment Replacement Reserve $150,000 $0 $150,000 with a minimum of$150,000 6)The City will strive to maintain a minimum target balance of $5 million in Capital Reserves,or 25%of the 5-year anticipated expenditures for General Fund and Tidelands Fund capital $5'000'000 $0 $5,000,000 projects(which ever is more) #VALUEI $13,813,178 #VALUEI GF Operating Expenditures sub-categories in FY 19-20:$221,000 for fuel at #VALUEI *The amounts shown here do not include$4.7 million set aside for a new swimming pool. **How to apply this CPI increase is not clear.Therefore,was not done in the above chart. ^The FY 18-19 budget was adopted before the new Reserve Policy was adopted.The adopted budget shows the following reserve amounts that were transferred above into the new policy designations: Assigned for Fiscal Policy $7,665,725 Unassigned Fund Balance $3,617,453 Economic Condition $1,750,000 Total FY 18-19 GF Budget Reserves $13,033,178 Staff Estimate for FY 18-19 Year-end VRF balance $780,000 Total applicable to new Reserve Policy $13,813,178 Police Staffing = #### "Real" Budget Surplus/(Deficit) $40,000,000 - $35,512,000 $36,663,000 $37,770,000 $38,660,000 I $35,000,000 J $30,000,000 11 Amor $25,000,000 1 $20,000,0001 1 $15,000,000 $10,000,000 $5,000,000 $ $0 . --1-_. ___Y_ --- --, -. r FY'18-19 FY'19-20 FY'20-21 FY'21-22 FY'22-23 General Fund Reserves Recommended ($ Millions) Reserves $1.0 - $24.6M $0.8 $0.6 $0.4 $0.2 $0.0 $0 0 — $0-0 --._$0.0_ -----._.$o 0 i� /MI$0.0 - - - --r AIM/ z' FY'18-19 FY'19-20 FY'20-21 FY'21-22 FY'22-23 Gloria Harper From: Robert Goldberg <rgoldberg@live.com> Sent: Monday, July 22, 2019 1:05 PM To: Schelly Sustarsic; Thomas Moore; Sandra Massa-Lavitt; Mike Varipapa; Joe Kalmick Cc: Jill Ingram; Gloria Harper; Bruce Bennett; Community Media Corporation; Jeannette Andruss; Elizbeth Kane; Joyce Subject: Addendum for Closed Session: Example of MOU with Reopen Provisions on Year 2 and 3 Salaries Attachments: MOU Reopener for Salary.pdf Dear Council Members, As a follow-up to my recommendation of offering a "reopen" provision in lieu of pay raises for FY 20-21 and 21-22, I wanted to share an example of an MOU that does this. The attached 2017-20 MOU from the County of El Dorado provides a pay raise in Year#1, but then in Years #2 and 3#, states "the EDCEA and the County shall negotiate the implementation of the Wage and Compensation Study and/or reopen on wages." This language now reminds me that I forgot to mention in my previous missive that our outstanding comp study is another reason that for avoiding a salary commitment now for FY 20-21 and 21-22. Thank you for your consideration, Robert Goldberg MEMORANDUM OF UNDERSTANDING Between The County of El Dorado And El Dorado County Employees' Association, Local 1 General, Professional, and Supervisory Bargaining Units July 1 , 2017 — June 30. 2020 a',DO c `oa�,Z cuotcr�,. .410,Wefew % A'af', `Pn' LOCAL l Section 7 Local 1 Presidential Release Time Up to a cumulative total of 200 hours per fiscal year will be provided to members, shop stewards, officers and/or Board of Directors of El Dorado County Employees Association Local 1, to be used for approved Local 1/County business (non-organizing). Among other uses, Local 1 release time may specifically be used for stewards' training. The determination of eligible employees and use of this time will be at the discretion of the President of Local 1. An employee entitled to release time under this section must provide advance notice and receive approval from the employee's supervisor regarding the employee's temporary absence from the workplace. Section 8 Orientation During the County orientation program. provided to new employees by the Department. of Human Resources, Local 1 shall be given the opportunity to provide information to new employees who are in classifications covered by this M.O.U. Local 1 presentation shall be informational and in good taste. ARTICLE 5 NON-DISCRIMINATION There shall be no discrimination in the implementation of this document because of race, religion, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, sexual orientation, age or, participation or non-participation in Local 1 activities against any employee covered hereby by Local 1 or the County. ARTICLE 6 WAGES & OTHER RELATED ISSUES Section 1 Wages YEAR #1: The current wage scale for all represented classes shall remain the same for the first year of the MOU. In addition to their current wage, each regular employee who is a member of this bargaining unit who is employed on the date the Board of Supervisors signs this MOU, shall be paid a one-time amount of $2,400 lump sum payment, minus applicable payroll deductions, no later than the third full pay period following Board of Supervisors' final approval of this MOU In addition, the EDCEA and the County agree to continue negotiations with respect to the application of the Classification and Compensation Study. P6oF& ) YEAR #2: Effective July 1, 2018 the EDCEA and the County shall negotiate the S implementation of the Wage and Compensation Study and/or reopen on wages .05 YEAR #3: Effective July 1, 2019 the EDCEA and the County shall negotiate the implementation of the Wage and Compensation Study and/or reopen on wage. During the term of this Memorandum of Understanding, the County has the non-appealable EDCEA Local 1 8 right to increase compensation for any classification covered by this Agreement. Prior to implementing any wage increase, the County shall notify, and provide the opportunity to discuss, its intention with Local 1 Section 2 Compensation Administration A salary range consisting of five steps shall be assigned to all classifications. A Entrance Salary 1. New Hires: Except as provided by the Personnel Rules, the entrance salary fcr a new employee will be the first step of the range for the class to which he/she is appointed. 2 Promotions: Employees who are promoted are eligible for advance step placement under Personnel Rule 1308. B. Salary Step Increases 1. After completion of thirteen (13) biweekly pay periods of service which meets standards at step 1 of the salary range, and upon recommendation of the appointing authority, the employee shall be advanced to the next higher step If an employee is appointed at a step higher than the first step of the salary range for that classification, the first increase shall be after completion of twenty six (26) full pay periods of service which meets standards. 2 After completion of twenty six (26) biweekly pay periods of service in each of the salary steps 2 and above, if the employee has completed probation, the employee shall be automatically advanced to the next higher step in the salary range However, the employee will not automatically advance to the next step of the applicable salary range if the employee's Appointing Authority or designee submits the required paperwork denying the step increase at least one full pay period prior to the employee's salary review date 3. All increases shall be effective on the first day of the biweekly pay period following completion of the required period of service. 4. A change in an employee's salary because of promotion or upward reclassification will set a new anniversary date for that employee. The salary anniversary date for an employee shall not be affected by a transfer, downward reclassification or a demotion. Salary range adjustments for a classification will not set a new salary anniversary date for employees. 5. Unless otherwise provided for herein or in Article 7, Section 10, the Personnel Rules and as subsequently amended shall apply and determine anniversary dates, pay change dates, etc. C Leave Without Pay Authorized leave without pay shall not extend an employee's date of eligibility for longevity pay increases and vacation accrual rates. Notwithstanding Article 6, Section EDCEA Local 1 9 f _ .