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BUDGET MESSAGE SECTION 2 <br /> <br />Other key proposed General Fund service enhancements in 2021-22 include: <br />• City Manager’s Office—community survey ($55,000). <br />• Human Resources—executive recruitments ($55,000), classification and <br />compensation study ($75,000), and City Hall building security ($65,000). <br />• Community Development—planning and code compliance services ($100,000). <br />• Public Works—debris/trash removal services through Code Compliance <br />($75,000), tree trimming ($354,000), turf maintenance (($94,000), and recycling <br />software ($55,000). <br />• Recreation & Human Services—Resource referral services ($54,000). <br />• Library—circulation materials ($183,500). <br /> <br />Salary Adjustments <br /> <br />The budget forecasts salary adjustments based on existing labor for all labor groups. <br />Salaries and benefits for periods in 2021-22 and 2022-23 outside existing Memorandums <br />of Understanding (MOUs) are adjusted by 2%. <br /> <br />Medical Insurance <br /> <br />Medical and dental insurance costs include estimated increases. The budget and the <br />multi-year forecast include annual 4% rate increases. <br /> <br />Retirement Plan Costs (CalPERS) <br /> <br />The City contracts with CalPERS to administer its pension plans. Pension costs are made <br />up of two parts including normal cost and unfunded liability amortization. Normal cost <br />represents service credits earned by active employees in the current year and is <br />calculated as a percentage of payroll. Based on the 2019 actuarial valuation reports <br />provided by CalPERS, the normal cost rates for Miscellaneous and Safety plans are <br />expected to remain close to the 2020-21 rates. While benefits remain unchanged, <br />pension contributions are expected to increase due to prior year portfolio losses and <br />changes in actuarial assumptions. Pension costs are projected to increase by 9% in <br />2021-22 estimated at approximately $21,600,000 for all funds. Please note that the <br />unfunded pension liability includes costs for firefighters who separated from the City when <br />fire services were contracted out. <br /> <br />Over many years, the City has taken proactive steps to buy down its unfunded liabilities. <br />The Finance Committee has been evaluating funding strategies for pension liabilities as <br />the City’s Other Post-Employment Benefits (OPEB) liability is adequately funded. The <br />City Council directed staff to establish a pension trust to mitigate rising pension costs and <br />the proposed budget reflects resource allocation for a $5,000,000 pension reserve. <br /> <br /> <br />13 <br />46