CITY COUNCIL WORKSHOP AGENDA PACKET

Page 4 of 6 Recommendations 1. The City’s financial forecast should be updated to reflect, as appropriate, our observations. In the year ahead, focused attention on the observations included in this report relative to the forecast will help to facilitate an even more accurate and beneficial forecast that can continue to inform the City’s discussion about future budgetary decisions. In particular, modeling additional scenarios in the financial forecast that reflect changes to the City’s key revenues and flat or reduced expenditures would increase the understanding of these variables by stakeholders and provide additional context for future budgetary decision-making. 2. The City should revise its approach to presenting complex financial information to employ compelling presentations, succinct staff reports, and appropriate supporting documentation to enhance the understandability and usability of information provided to the City Council and the public. Further, simplifying the presentation and highlighting key trends will make it easier for all stakeholders, including those without a financial background, to grasp the essential information and trust in the comprehensiveness and accuracy of the City’s budget and financial forecast. We recommend that the City revise its communication approach to address these concerns and provide additional focused education to stakeholders to enhance their foundational knowledge. 3. The City should develop a multi-year plan to prioritize and complete the remaining elements of its plan to catalog and eventually address its long-term funding needs. We recommend that the City develop a written multi-year financial management work plan to tackle these important issues so that an appropriate pace of progress is maintained within the bandwidth of the staff resources that are available. 4. The City should develop a plan to draw down its pension and OPEB trust funds for pension and OPEB costs, as appropriate, and incorporate those drawdowns into the baseline scenario of the financial forecast. As a component of the City’s broader long-term financial planning process, we recommend that the City evaluate an appropriate, measured approach to utilizing these funds to offset pension and OPEB costs as part of its baseline financial forecast. This approach should be informed by an analysis generating a long-term plan to draw the funds down in consultation with the City’s actuarial consultants. It is worth noting that the period of time over which it is appropriate to gradually draw down on these funds will likely well exceed the ten-year period covered by the financial forecast. As these funds are currently and significantly exceeded by the City’s unfunded liabilities, continued focus on utilizing these funds only for funding long- term pension and OPEB costs related to the City’s unfunded liabilities is appropriate. 5. Once the City’s infrastructure funding plan, and any other funding plans, are complete the City should revise its reserve policy to reflect Internal Service Fund reserve minimum balances based on a cash flow analysis of future needs. It is recommended that the reserve policy relative to the Internal Service Funds be reassessed to incorporate a funding policy based on needs rather than minimum balances. 6. Once the City’s infrastructure funding plan, and any other funding plans, are complete the City should develop a presentation illustrating these needs across Page 6 of 33