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• Increases by CalPERS of the equivalent of $7.6 million by 2015-16 <br />and escalating thereafter <br />¦ Interim City Manager O'Rourke indicated that it may be as <br />high as 50% of current rate by 2015-16 <br />• Increases in medical costs of $1 million annually are included <br />¦ Councilmember Martinez inquired about unfunded liability. <br />Major Costs: PERS and Health <br />• Existing Oct-2012 CalPERS forecasted rates, plus <br />¦ 0.25% discount rate cut <br />¦ mortality improvements <br />¦ Rate smoothing/amortization changes <br />¦ PEPRA savings (lower benefits proposed for future hires) <br />¦ 11/12 investment loss (not included in assumptions by PERS) <br />Estimated Net Rate Increase Over 13-14 as Percent of Payroll <br />FY 1 All R FY 1 R/1 R FY 1A/17 <br />• Safety 5.0% 13.2% 19.0% <br />• Misc 3.8% 9.9% 14.2% <br />Major costs: rtKzj ana rleann <br />PERS Employer Rates <br />• Major increases start FY • Recent growth 7.3%, 12/13 9%; <br />14/15 staff estimate is 9% ongoing <br />• Major unknown: potential • Major unknown: Federal <br />for greater discount rate Affordable Care Act impacts <br />cut <br />• Mayor Pulido indicated that in the past CalPERS reported being <br />super funded; however, reform/structural changes are needed at <br />the State level too. <br />• Mayor Pro Tern Tinajero noted for comparison purposes that <br />teacher's STRS program has 2.4% at 62 formula. <br />Forecast Assumptions - Other <br />7. Growth Assumptions in Cost of Services and Supplies <br />• No increases for 2013-14 and 2014-15 and 2% thereafter <br />8. No General Fund Contributions to CIP Included <br />• Inventory of City facilities and infrastructure needs is underway <br />CITY COUNCIL MINUTES 3 APRIL 16, 2013 <br />1 0C-3