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<br /> r Lf.AS.4N TONe
<br /> BUDGET SUMMARY
<br /> 2011/12FY 8 2012/13FY Operating Budget
<br /> active members; consequently the Police Group was put into a risk pool. At the time of joining
<br /> the risk pool, a Side Fund was created to account for the difference between the funded status
<br /> of the City's plan and the funded status of the risk pool. CaIPERS then funded the Side Fund
<br /> obligation on behalf of the City and in turn the City must repay the obligation to CaIPERS. The
<br /> outstanding amount was $8,189,551 as of June 30, 2010. This obligation is being repaid over
<br /> a 20 year period at an interest rate of 7.75%, which is the actuarially assumed rate of return for
<br /> the CaIPERS fund.
<br /> Paying off the Side Fund Loan early will yield significant long-term financial benefits to the City
<br /> including savings of future interest costs of $3,509,653 and an immediate reduction in
<br /> operating expenses starting in the 2011/12FY. The savings from the repayment of the Side
<br /> Fund Loan is not included in the Budget. This item will be presented to Council and if
<br /> approved, will be incorporated in the Budget.
<br /> Analysis of Expenditures by Category
<br /> General Fund expenditures are estimated to be $84.5 million in 2011/12FY, a 1.8% increase
<br /> over the 2010/11 FY Midyear Budget and $87.3 million in 2012/13FY, a 3.3% increase over the
<br /> proposed 2011/12FY Budget.
<br /> The following table summarizes the Budget changes in each expenditure category.
<br /> In Millions
<br /> 2010/11 FY
<br /> 2008/09FY 2009/10FY Midyear 2011/12FY % 2012/13FY %
<br /> Expenditure Category Actual Actual Budget Budget _Change Budget Change
<br /> Personnel 66,438,272 67,112,603 65,295,293 66,522,379 1.9% 68,285,813 2.7%
<br /> Transportation&Training 1,658,456 1,774,826 1,222,683 1,301,441 6.4% 1,768,967 35.9%
<br /> Repairs&Maintenance 1,935,997 2,555,703 1,776,735 1,786,196 0.5% 2,465,572 38.0%
<br /> Materials&Supplies 14,471,513 12,557,543 14,186,154 14,444,672 1.8% 14,362,937 -0.6%
<br /> Capital Outlay 741,466 530,898 495,551 421,532 -14.9% 415,132 -1.5%
<br /> Prior Year Eery (19,600)
<br /> Total 85,245704 84,511,973 82,976,416 84,476,220 ' 1.8% 87,298,421 3.3%
<br /> Personnel
<br /> Personnel costs represent 79% of the General Fund Budget and are increasing 1.9% in
<br /> 2011/12FY and 2.7% in 2012/13FY. The Personnel cost increases include step increases
<br /> pursuant to existing labor contracts, increases for health and other benefits and assumes
<br /> increases in PERS rates (see PERS Rate History Table on the following page), medical costs
<br /> (15% per year), and increases in annual funding of the retiree medical reserves (OPEB) . No
<br /> increases have been budgeted for existing labor contracts which expire as follows: PCEA
<br /> contract expired October 31, 2010; POA contract expires May 31, 2011; and the LPFD
<br /> contract expires December 1, 2011.
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