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Staff assumed a 15% increase in health insurance premiums for the 2012/13FY. We have received the notice of premiums from our health insurance providers and the actual increases are approximately 5% for a savings of $963,460. Other assumptions made for labor contracts where the negotiations are final (PCEA, POA) are reflected in the 2012/13FY Mid-Term budget. The PCEA contract expires March 31, 2013 and the IAFF contract expired December 31, 2011. Any personnel cost changes from those negotiations are not reflected in the Mid-Term Budget other than the following assumptions regarding the Employer Paid Member Contribution (EPMC) paid by the City. Table 8 Employer Paid Member Contribution (Portion Paid by the City) Management Miscellaneous Safety-Fire Safety-Police Rate Rate Rate Rate 2012/13 (projected) 0.00% 3.70% * 1.50% * 3.00% 2011/12 4.00% 6.00% 7.00% 4.70% *IAFF is in contract negotiations and the current PCEA contract expires March 31, 2013. The original 2012/13FY Budget had assumed the Police Officers bargaining unit would pick up 5.5% of the EPMC. Instead they are picking up 6% beginning July 1, 2012; this additional savings is approximately $200,000. These decreases in expenditures are offset by higher than anticipated contributions for retiree medical post-retirement benefits and the addition of one limited term Senior Planner in the Community Development Department. The bi-annual actuarial study (June 30, 2011) for retiree medical benefits was completed by Bartel & Associates in February 2012 and indicated for the 2012/13FY that the annual required contribution (ARC) for retiree medical post- retirement benefits for the General Fund is $1.5M greater than projected in the Original 2012/13FY Budget. The Senior Planner position will assist in the implementation of the Housing Element and the Climate Action Plan. Two-thirds of the cost of the position will be funded by the Low Income Housing Fund as that amount of work would be related to the implementation of the Housing Element. The net cost of this position to the General Fund is $60,651. In July 2011 the City paid-off the PERS Side Fund for the Police Officers Group in the amount of $7.8M. For the next seven years (including 2012FY) the General Fund will be repaying the retiree medical reserve for the advance of these funds ($7.8M). Therefore, this transaction is revenue neutral (no savings realized) until after the repayment in approximately 2018/19FY. The following is a summary of the (majority of the) changes in personnel costs for the General Fund for 2012/13FY: 5