CITY COUNCIL WORKSHOP AGENDA PACKET

Page 13 of 16 available at that time. For example, if $10.0 million is withdrawn from the pension trust starting in FY 2025/26, with $51.1 million in trust funds the funds will almost be depleted in about five years and left with about $1.1 million. The General Fund structural deficit remains even with the use of pension trust funds since this is not a one-time budget problem. The City’s pension costs are expected to go down significantly in about 20 years, as more members enroll in the newer/less generous benefit plans. At that point, the City can divert its resources to fund capital improvements and deferred maintenance. Given the City does not have the financial resources for significant capital investments and the half-cent sales tax measure did not pass (and there is no plan, or guarantee of success, for any future measure), deferred maintenance costs are expected to increase significantly over time as community assets continue to age. Costs to repair will be higher the longer the maintenance is deferred. The unfunded retiree medical liability is lower than the pension liability, and the market value of the assets totaled $81.3 million at the end of FY 2023/24, including the City’s share of assets with Livermore-Pleasanton Fire Department (LPFD). As the liability is paid down over time, resources should also be diverted to fund deferred maintenance. While it may be appropriate to use one-time money, such as reserves and trust funds, to bridge the budget gap temporarily, the City needs to develop a long-term plan to sustain Page 15 of 109