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quickly, but the City's long-term financial planning will continue to normalize or level-off these PERS spikes over the long-term. In hindsight, while the City budgeted for its full normal costs, it should have also set the funds aside for future increases. While increases were expected, no one predicted the sudden large swings. As a result, the City's Economic Vitality Committee (EVC) has recommended that the Economic Development/Fiscal Element of the City's General Plan be amended as part of the current update process, to require the City to fund (not just budget) for at least its normal PERS costs each year. By setting the dollars aside in years that the rates fall below normal, future rate increases above normal levels can be at least partially funded from this source, thereby smoothing the ups and downs of PERS rates. Since the time the EVC made this recommendation, the PERS Board has started the review of a plan to better normalize rates. If the plan is adopted, rates for local agencies could be reduced as early as 2006-07. However, it may still be a number of years before we see normal rates again, and even less likely that rates in the near term will approach the 0% experienced in the mid 1990s. The following table reflects the employer rate fluctuations in the last decade. More detailed information is provided in Appendix I. PERS Rate History Misc Fire Police =iscal Year .~006-07' 18.3% 25.4% 27.0% ->005-06 18.5% 25.0% 27.0% ->004-05 15,2% 23.2% 23.5% ->003-04 10.2°{ 9.1% 2.9% .~002-03 0.3°{ 0,6°{ 0.1% .>001-02 0.0% 0.0% 7.5% I0 mos 0.0% 2 mos >.000-01 0.0% 0.0% 1.4% 1999-00 2.7°{ 0.0% 4.6% 1998-99 7.4°{ 16.9°{ 12.1% 1997-98 7.3°{ 0.5°{ 11.0% 1996-97 4.5°{ 6.8% 12.1% 1995-96 6.4°{ 12.0°{ 11.7% 1994-95 6.5°{ 12.2°{ 11.8% 1993-94 5.5°{ 13.4°{ 15.4% 1992-93 4.9°{ 12.7°{ 13.9% *projected e. Medical Premiums Providing quality, affordable health care for City employees has become a difficult challenge. The basic problem is the rapidly rising cost of health care, b48