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Recommendation to request that a study session be scheduled within 60 days of the adoption of the FY 13 budget to discuss the City's unfunded liabilities, and how a plan to fund some of these liabilities may reduce structural costs in the General Fund over the long term, thus preserving vital City services.
DISCUSSION
During discussion of this year's budget, one theme has become painfully clear-the City must control its costs. If we do not control the growth of our costs so that they more closely reflect our growth of revenue, the next decade will look much like the last-year after year of significant annual cuts to services.
One way that the City can help control its long-term costs is by looking at its unfunded liabilities. Such obligations of the City, if ignored, may grow to be significantly more expensive in future years. This could significantly raise our cost to provide services, such as police services or libraries.
On March 29, 2011, City Management presented to the City Council regarding our unfunded liabilities (attached). While the City's billion dollar plus unfunded liability has been thoroughly discussed, other unfunded liabilities include workers' compensation, post employment health care, and sick leave. It is now time to take a fresh look at these unfunded liabilities, given their importance to the City's future well being.
It is requested that within 60 days of adopting the FY13 budget the City Manager present to the City Council an updated presentation highlighting the significant unfunded liabilities of the City, highlighting opportunities for the City to reduce its long-term costs of providing services by funding these obligations earlier than would otherwise be the case.
FISCAL IMPACT
Recognizing and funding the city's future liabilities has the potential to reduce the City's structural costs, preserving services in future years. The exact future savings realized, and the present day investment required to realize those saving...
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