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• PERS rates significantly increasing <br />• City has cut maintenance and other costs that cannot be <br />permanently eliminated, just deferred <br />PIERS Cost Increases <br />60.000% <br />50.000% <br />48.600'9 <br />42,600% " <br />40.000`3 <br />36.600,4 36.600".6 36.60036 <br />28.848% 30.800 -'/ <br />30.00036 <br />30.000% <br />26.000% <br />26.40034 —Safety <br />24.499`9 23.90644 <br />22.32336 22.567% <br />.- <br />22.900 — " <br />- -Miscellaneous <br />20.000% <br />_- ....e..._r -"" <br />22.900% 2290096 22900% <br />188 .3739f, 19 300'9 <br />%y <br />1S.000% <br />10.0001/1: <br />r 13.312% <br />8.214% 7 073`9 6.816% <br />0.000% <br />f Y 12/13 Projected Projected Projected <br />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 <br />What Does This Mean? <br />• Significant structural deficit — costs exceed revenues <br />• In spite of the significant cuts made in the last few years, economy <br />has not improved and reductions have not been enough <br />• Costs will now need to be reduced in major ways, absent major <br />new revenues <br />The Deficit <br />• Management Partners' forecast was completed in May — with a <br />deficit of $13.6M this year and over $18M in FY 12/13 <br />• The gap is now identified by City staff to be $30M for FY 12/13 due <br />to new revenue problems <br />■ State takeaways and declining utility users tax <br />Stabilization Study Report <br />• Provides a menu of solutions and strategies <br />• Strategies could generate $26M to $27M in annual savings and <br />new revenue <br />• None of the solutions are easy <br />• They do represent ideas that are being executed around the State <br />Ultimate Goal Is to Preserve Services <br />• Services are vitally important to the people of Santa Ana <br />• Making existing services more efficient should be the first priority <br />• Reducing or eliminating services should be a last resort, only if <br />maximizing efficiency is not enough <br />CITY COUNCIL MINUTES 17 SEPTEMBER 19, 2011 <br />1 0A -17 <br />