The Benicia City Council presented employee recognition awards at its regularly scheduled meeting Tuesday before commencing with other business, including the formal appointment of new City Manager Lorie Tinfow, who will begin serving the city on April 17.
Awards were presented to:
Employee of the Year – Danilo Stanovich, Public Works;
Rookie of the Year – Megan Segle, Library;
Inspirational Employee of the Year – Donna Ernst, City Attorney’s Office;
Police Officer of the Year – Detective MarJonne Roberson; and
Firefighter of the Year – Wayne Fraser, Firefighter/Paramedic.
New City Manager
The council unanimously approved the appointment of new city manager Lorie Tinfow. Solano County Supervisor Monica Brown was present and spoke during the public comment period to welcome Tinfow and offer her support.
After a brief recess, the council took up the second part of the session, a joint meeting with the city’s finance committee.
John Bartel of Bartel Associates presented the results of the CalPERS Actuarial Issues for the June 30, 2015 Valuation for both the Miscellaneous and Safety Plans of the city. As CalPERS have lowered the discount rate and the city has unfunded liability that needs to be reduced over time, staff sought direction from the council on the next steps.
The Government Accounting Standards Board (GASB), Statement No. 68, requires reporting of the net pension liability in accrual-based financial statements. The city’s Comprehensive Annual Financial report (CAFR) beginning in Fiscal Year 2014-15 has presented this liability. The city has contracted with Bartel Associates to prepare and review the CalPERS Actuarial Valuation as of June 30, 2015 for both the Miscellaneous and Safety Plans of the city. The preliminary results address the city’s normal contributions as well as the unfunded liabilities associated with the city’s plans.
Bartel noted that it was fortunate that the study was conducted during the time of a major change in policy by CalPERS, so that the report already reflects that change. The change, as Bartel explained it, was that CalPERS altered its investment policy away from leveraged real estate investments and toward more long-term investment products. He advised that the council receive updates at least every two years in order to stay current with such changes.
While participants in CalPERS will see significant increases to their contributions over the next 10 to 15 years, Bartel stated that overall, it is advantageous that CalPERS is now planning farther into the future than they were in the past, in addition to acknowledging increasing costs that were previously under-represented.
The report concluded with a list of steps the city could take to mitigate the volatility of future CalPERS contributions.
A complete copy of the Bartel Associates CalPERS valuation report is available in the agenda packet from the Feb. 28 City Council meeting, online at ci.benicia.ca.us under the heading Government/ Agendas, or by request to the city of Benicia at 746-4200.
Finance Director Karin Schnaider presented the city’s 10-year forecast, which staff will use in formulating a 2017-2019 biennial budget. Schnaider explained that the forecast is not a predictor but rather a tool to show what would happen if current assumptions and circumstances were to remain unchanged.
“The forecast allows the city to view its current trajectory and project that into future years,” the report summarizes.
The report assumes continued trends in revenues and funding liabilities and retention of current levels of service.
Based on the staffing level approved by council on Feb. 21 for the 2017-2019 budget, General Fund salary and benefit expenses use nearly 70 percent of General Fund resources, and Water and Wastewater salary and benefit expenses use nearly 50 percent of that fund’s resources. The forecast report also incorporates anticipated pension costs and Workers’ Compensation liabilities. It is projected that by the end of Fiscal Year 2020-2021, the city’s reserves will be completely emptied, with deficits climbing by 2025/2026 to more than $38 million.
The council discussed options for addressing the projected deficits, including, in no specified order:
* Stabilization of pensions, Workers’ Compensation liabilities and facilities;
* Increased fees;
* Improved efficiency with new technology;
* Reduction of city staff;
* Greater employee contributions to CalPERS;
* Sale or gifting of the Benicia Marina;
* User utility tax;
* Modernization of the city’s franchise tax;
* Franchise tax on port activities;
* Formation of an assessment district;
* Implementation of Enterprise Resource Planning (ERP) software;
* Pension obligation bonds;
* Business license tax increase.
Mayor Elizabeth Patterson directed staff to plan for group study sessions and other public involvement and engagement as part of the process of weighing the city’s options.
A detailed analysis of the 10-year forecast and supporting data are available in the Feb. 28 city council meeting agenda packet, online at ci.benicia.ca.us under the heading Government/ Agendas, or by request to the city of Benicia at 746-4200. A video transcript of the meeting is also available at the website.