CORRESPONDENCE- 65A - Laserfiche WebLink

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There is no short-term relief in sight and as such, the financial crisis we are seeing ahead of us needs to be tackled with long term strategies and notjust one-time relief measures. I would urge the City Council to ask more about the one item in the staff report without a potential annual amount next to it..."Seek concessions with the City's employee bargaining groups." Utilizing the Unappropriated Fund Balance or the Economic Uncertainty Reserve are one-time hits and ones that will not continue into the future with any impact. However, exploring concessions from the city's employees should be explored. It is the one items that is not really discussed in the staff report. As such, it is the item that I feel will likely not be explored much. Now I understand, no one wants to make less money and virtually no councilmember wants to be the one to even explore this option, but when you are in charge of an enterprise the size of our city, it has to be an option that is explored. How much impact would it have? What are some dollar savings based on certain percentage reductions? How does the City even go about renegotiating previous contracts? Which contracts have the biggest bang for the buck? Would the City's employees rather have a pay and benefit reduction as opposed to the city reducing services or headcount? These are options that business owners are certainly grappling with as we speak. These are options that have to be explored and explored in an open and honest way. If we do not start exploring this now, it may be too late and then the City will be forced to go down roads that are even worse. I urge the council to direct staff to not only prepare a 20/21 budget utilizing the Reserve for Economic Uncertainty but also bring back quantifiable options for concessions with the City's employee groups. Secondly, I would urge the council to direct staff to bring back a 20/21 budget that is closer to the UCLA Anderson/Fitch GDP forecast whereby revenue will drop by $50M+. The city council and the residents deserve to see what our city services will look like under this scenario also. 65A(51: Direct staff return with a feasibility analysis for issuing Pension Obligation Bonds (POB) The City's pension costs are increasing annually and as discussed in the Staff Report, the city has a sizeable CalPERS Unfunded Actuarial Liability (UAL). This UAL costs the city 7% per year. It is expected that the future UAL will increase due to the recent investment performance of CalPERS being far lower than its target rate of return. I feel that council and residents should understand what issuing a POB is and is not. We should also understand the magnitude of the City's UAL and what it means today and into the future. However, I find it ironic that this is a recommendation to issue these POBs without also instructing staff to bring back feasibility studies of other cost savings measures such as mentioned above with regards to options with the City's bargaining groups. Or, what one-time expenditures will be cut in the FY 20/21 budget. The council and residents should have all the information so that we can all make good quality choices for today and tomorrow. By singling out direction to Staff on this one item without directing them on other items, it implies that POBs are a higher priority than other options available. For example, I believe that the everyday resident does not understand what one-time expenses that would be cut in the FY 20/21 budget would "feel like" on an everyday basis. There may be one-time items that should be kept while there may be recurring obligations that should be renegotiated. Again, maybe staff knows this but the residents do not. I would urge you to not only direct staff to come back with feasibility analysis on POBs but also on all cost saving measures including renegotiating with employee bargaining groups, pension obligation restructuring at the state level for existing employees as well as future hires, and any other options that should be placed on the table including outsourcing where savings may be obtained. Overall I am concerned for our city. This pandemic has already brought havoc on society and now we will feel the economic impacts of such havoc. This is no time to tip toe around sensitive items. The time to act is now. I pray for wisdom for 5