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Personnel Personnel costs represent 75.3 percent of the FY 2021/22 General Fund Budget.The Personnel cost increases include step and salary increases pursuant to existing labor contracts,slight increases in health and other benefit costs, increases in PERS rates (see PERS Rate History Table below),and increases in annual funding of worker's compensation reserves. The increases for all funds over the next two years: FY 2021/22 FY 2022/23 Total PERS Employer Contribution Increases2 $1.9M $1.2M Labor Cost Increases per existing MOUs Police-POA 3% 3% Fire- IAFF 1% 0 PCEA 3% 0 Increases in Health Insurance Expenses $1M $0.4M The Fire - IAFF MOU expires on December 31,2021.Thus,while the percent increases noted are one percent for FY 2021/22 and zero in FY 2022/23 that amount will change once the MOU is finalized and will be reflected in both the FY 2021/22 Midyear and FY 2022/23 Midterm updates. Similarly,the PCEA three percent wage increase was effective April 3, 2021. The current MOU expires March 31,2022. Once the MOU is finalized,the negotiated wage increase will be reflected in the FY 2022/23 Midterm budget. While Pension expenses are increasing,the overall increase of$1.9 million in FY 2021/22 is comparing the FY 2020/21 Midyear budget which reflected filled positions where the City paid pension benefits and excluded vacant positions for which the City has not paid pension benefits.If there are a similar number of vacancies in FY 2021/22 as FY 2020/21,then pension expenses will not increase by$1.9 million but by a much smaller amount. Similarly,Health premium rates for Kaiser are decreasing by less than one percent in FY 2021/22.The overall increase of$1 million in FY 2021/22 is comparing the FY 2020/21 Midyear budget which reflected filled positions where the City paid health benefits and excluded vacant positions for which the City has not paid health benefits.The FY 2021/22 budget assumes all positions are filled.If there are a similar number of vacancies in FY 2021/22 as FY 2020/21,then health benefit expenses will not increase by$1 million but by a much smaller amount or a net decrease as reflected in the Kaiser rates. 33 City of Pleasanton Operating Budget • FY 2021/22 - FY 2022/23