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5. E -mail from Kay Ayala 5.1 The Economic and Fiscal Element of the proposed General Plan deals with fiscal issues. Policy 14 states: "Dedicate, and maintain reserves to meet known and estimated future obligations." Program 14.4 states: "Fund at least the annual normal employer rate established by the Public Employees Retirement System (PERS), and transfer any excess to a reserve to offset future increases above the normal rate, except as otherwise determined by City Council. In large measure the answer to this question depends upon national economic and health care trends and developments that are impossible to predict. However, those uncertainties notwithstanding, the City has the flexibility to monitor revenue and expenditure trends and make necessary adjustments to maintain a balanced budget. The City of Pleasanton currently contracts with CaIPERS to provide pension benefits. Ca1PERS determines the employer's annual contribution based on annual actuarial valuations and certain other policies regarding the market value of employer assets and the amortization period for recognizing gains and /or losses in an effort to smooth volatility of rates. The City of Pleasanton has historically viewed annual pension costs as a contractual responsibility and has allocated resources accordingly. City management has been working aggressively to modify health benefit programs to reduce future liabilities and will continue to address cost issues incrementally with employee labor groups as contract negotiations occur. The most recent contract agreements with the International Association of Firefighters (TAFF), and the Police Officers Association (POA) addressed health cost issues for both active and retirees. The following plan design changes were negotiated with IAFF (International Association of Firefighters) in an effort to limit the growth in future liability. For employees in IAFF retiring from service after January 1, 2008, the City shall pay for each year of service, four percent (4 of the City's monthly premium based on the lowest HMO medical plan for the employee and one dependent. Effective July 1, 2009, the City contribution toward any increase in medical plan premiums will also be limited to a maximum of 15 Also, effective January 1, 2008 co -pays for office visits and prescription drugs were increased. The changes for the POA involve identical measures except for the effective dates. The plan design changes described above effective July 1, 2009 and the 15% cap on city contributions for active become effective July 1, 2010. In addition, employees after January 1, 2010 who retire prior to the completion of twenty years of full-time service shall receive four percent (4 for each year of service but of the single plan rate for the lowest cost HMO. final response to comments with throw paws 24