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Ms. Wagner explained that one change relates to GASB 54, which will require jurisdictions to record <br /> their unfunded liabilities on the books and enable the city to reflect the $3 million set aside thus far as a <br /> deferred payment. <br /> Mr. Fialho summarized a previous conversation he had with the Mayor on the matter, which relates to <br /> modifications CaIPERS has made to their assumptions that will increase the employer rates. As a <br /> result, more money will be budgeted to CaIPERS to reflect the true cost of the benefit and the <br /> unintended consequence of that is that there may be a lesser fund balance at year end because those <br /> increased payments have already been budgeted into the fiscal year. <br /> Mayor Thorne agreed, also noting that the cost of those increases is anticipated to be approximately <br /> equal to what the city has been setting aside in the PERS Stabilization Fund. <br /> Ms. Wagner agreed that they are anticipating some sizable increases. The hope is that these additional <br /> payments will help to stabilize that growth in the long-term, with the difference being that they will now <br /> be more required than voluntary. <br /> Councilmember Narum requested clarification on the Management Employees Performance <br /> Adjustment. <br /> Ms. Wagner explained that staff is proposing to transfer the amount into the fund balance now because <br /> the adjustments are made sometime between now and the next budget discussion in March 2014. She <br /> also explained that while staff is requesting authorization now, they expect there will actually be excess <br /> monies in the 2013/14FY budget to cover the adjustment. <br /> Councilmember Brown asked if the adjustment is a cost of living increase of bonus and whether it <br /> would come back to the Council for final approval. <br /> Mr. Fialho explained that managers are evaluated each year and as part of that, may be eligible for <br /> performance adjustments based on recommendations from department heads that are ultimately <br /> approved by him. <br /> Councilmember Narum asked when they last received performance raises. <br /> Mr. Fialho said the last true performance adjustment was issued in 2007. He noted that the Council <br /> authorized a onetime bonus of 3% last year. <br /> Ms. Wagner reviewed the Water Operating Fund which started the fiscal year with just over $6 million in <br /> the fund balance. Revenues totaled $21.7 million versus the $20.9 million that was projected, primarily <br /> due to a gain in water sales. Transfers totaled almost $1.9 million, approximately $41,000 over what <br /> was originally estimated, and expenditures totaled $19.44 million versus the $19.42 million that was <br /> projected. The year ended with a fund balance of $6.4 million, approximately $700,000 more than the <br /> $5.7 million anticipated. She called particular attention to the ending fund balance of$6.4 million which <br /> essentially meets the goal of maintaining a $6.5 million fund balance, as identified in the 2010 rate <br /> study. Water rates are next due for review in September 2015. <br /> She reviewed the Sewer Operating Fund which began the year with a fund balance of $3.8 million. <br /> Revenues of $12.9 million exceeded projections by $64,000, transfers totaled a little over $1 million, <br /> and expenditures of $11.8 million exceeded projections by approximately $150,000. While the fund <br /> experienced a slight loss of$16,572, it continues to meet the goal of maintaining a fund balance of $3.5 <br /> million and is considered stable. Sewer rates are also due for review no later than September 2015. <br /> The Golf Course Enterprise Fund started the year with a little less than $1.2 million, which was <br /> ultimately transferred out to assist with paying off the outstanding bonds. Revenues slightly exceeded <br /> City Council Minutes Page 4 of 6 November 19, 2013 <br />