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File Number: 14-156 <br />City Council on September 16, 2013. The annual report confirmed that the Measure Z <br />revenues were accounted for and properly spent in accordance with the voter’s wishes . <br />(Refer to Exhibit 5.) <br />DISCUSSION <br />Budget Considerations <br />The 2014-15 budget is the plan and the resource allocation that guides and assures <br />implementation of the City Council policy and priorities. Several considerations have arisen <br />over the last few months regarding additional resources and resource use that are now taken <br />into account when proposing budget adjustments for 2014-15: <br />·GASB 67 and 68: In 2013-14 the Government Accounting Standards Board (GASB) <br />Statement Number 67 revises existing guidance for the financial reports of most <br />pension plans and in 2014-15 GASB Statement Number 68 will be implemented <br />related to new pension reporting requirements. These requirements: <br />o Recognize long-term obligation as liabilities on the balance sheet for the first <br />time, <br />o Measure annual pension benefit costs more comprehensively and comparably, <br />and <br />o Enhance pension plans disclosures and required supplementary information. <br />·Alameda County Fire Department Services: The 2014-15 adopted budget includes <br />$19,593,100 for contract fire services (a 3% increase from the 2013-14 adopted <br />budget) and $600,000 for the Other Post Employment Benefit (OPEB) set-aside. <br />Alameda County proposed: <br />o $19,877,543 in contract service costs (the majority of the increase is associated <br />with salaries and benefits) for 2014-15, and <br />o $720,000 for an engine replacement and part-time Deputy Fire Marshal SUV <br />replacement. <br />The proposed additional costs from Alameda County are not included in the 2014-15 <br />projected budget. <br />·Pension Changes: In April 2014, CalPERS announced a significant increase in the City <br />of San Leandro’s pension cost of $1,150,000 per year. This increase represents <br />almost $13,000 per safety employee cost, commencing in 2015-16. The City’s safety <br />plan pension cost was $2,700,000 in 2012-13. Despite the League of California Cities <br />and CalPERS effort to clarify cause and effect , assumptions are unclear that have led <br />to San Leandro receiving the largest incremental liability of any city in the State. The <br />City has requested the CalPERS Board defer its May 21, 2014 authorization to allow <br />time to understand the new methodology and impact on the 2015-16 budget. In the <br />interim, staff has included the increased annual cost on the General Fund 7 year <br />forecast (refer to Exhibit 3). This added cost continues a troubling trend of CalPERS’ <br />modified assumptions leading to increased costs during the past several years. <br />·PERS/OPEB Unfunded Liabilities are greater than $100 million. The rising liability is <br />partially offset by the City employees’ new agreements in 2013, which require all to <br />Page 2 City of San Leandro Printed on 5/13/2014