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• PERS rates significantly increasing • City has cut maintenance and other costs that cannot be permanently eliminated, just deferred PIERS Cost Increases 60.000% 50.000% 48.600'9 42.600x: " 40.000`3 36.600,4 36.600".6 36.60036 28.848% 30.800-' / 30.00036 30.000% ` 26.000% 26.40034 , -Safety Safety 24.499 9 23.90644 22.32336 22.567% 22.900. --Miscellaneous 20.000% 2.900%229 0096 22900% 18 8 3739f, 19300'9 --" r . %y 1S.000% 10.0001/1: r 13.312% 8.214% 7 073`9 6.816% 0.000% f Y 12/13 Projected Projected Projected FY 06/07 FY 07/08 FY 08/09 FY 09/10 FY 10/ 11 FY 11112 FY 13/14 FY 14/15 FY 15/16 What Does This Mean? • Significant structural deficit - costs exceed revenues • In spite of the significant cuts made in the last few years, economy has not improved and reductions have not been enough • Costs will now need to be reduced in major ways, absent major new revenues The Deficit • Management Partners' forecast was completed in May - with a deficit of $13.6M this year and over $18M in FY 12/13 • The gap is now identified by City staff to be $30M for FY 12/13 due to new revenue problems ¦ State takeaways and declining utility users tax Stabilization Study Report • Provides a menu of solutions and strategies • Strategies could generate $26M to $27M in annual savings and new revenue • None of the solutions are easy • They do represent ideas that are being executed around the State Ultimate Goal Is to Preserve Services • Services are vitally important to the people of Santa Ana • Making existing services more efficient should be the first priority • Reducing or eliminating services should be a last resort, only if maximizing efficiency is not enough CITY COUNCIL MINUTES 17 SEPTEMBER 19, 2011 1 0A-17