City Takes Steps to Address Added Retirement Costs
At Monday’s City Council meeting, the City Council approved a 3-year plan for combating the increasing costs associated to retirement that many cities in the state are facing. The actions were necessary as payments that will be due to CalPERS (California Public Employees Retirement System) for pension costs are forecasted to grow to over $11 million by fiscal year 2032-2033. Following the fiscal sustainability workshop held on January 11, the City Council directed staff to execute a multi-pronged multi-year plan to fund the debt. The strategies identified include lowering operating expenses and increasing revenues, as well as refinancing a large portion of what is due at a lower interest rate. Following is a summary of the steps that will be undertaken as part of the 2018-19 fiscal year.
- Begin process for issuance of pension bond. By doing this the City will pay off a majority of its unfunded obligation due to CalPERS and get a more favorable interest rate via the private bond. The bond term is the same as what is being offered by CalPERS (30 years) the City will save an estimated $35 million in interest payments.
- Change 3 Engineer/Paramedic positions to Paramedic only assignments- Staffing of the ambulance at Fire Station 3 will change from one engineer/paramedic and one firefighter/paramedic to two firefighter/paramedics. The engineer rank will go from 9 to 6 total personnel; however, firefighter/paramedics will increase from 15 to 18 positions. All La Verne Fire Department units will remain at current staffing and the number of fire department sworn personnel will remain unchanged at 34 employees.
- Initiate a yearly business fire inspection fee- The Fire Department will establish a fee for the yearly fire and life safety inspections that will be based on the square footage of the business.
- Reassign six Firefighter/Paramedics to non-ambulance fire assignments- The City will exercise the provision of the 2014 La Verne Firefighters Association Memorandum of Understanding which provides a 5% bonus for Firefighter/Paramedics not assigned to an ambulance. Of the current complement, six will be subjected to the 5% while 12 will continue to receive the 15% bonus for maintaining a paramedic license.
- As permitted under the Los Angeles County Building Code begin charging contractors that require an excessive number of repeated building inspections. This change will now allow charging when additional fees are warranted.
- Begin charging double permit fee for permits that are issued where illegal construction has been identified as permitted under the Los Angeles County Building Code.
- With the start of the new fiscal year, the city will move to performing street sweeping by outside contractors versus conducted in house. Current personnel will be reassigned.
- The City’s Capital Improvement Program (CIP) typically receives support from the City’s general fund in the amount of $250,000 each year. The City is currently reviewing CIP projects supported by the General fund and re-prioritizing said projects should General fund support be compromised.
- The City intends to sell excess land along Amherst Avenue for housing. This action will put the land to better use and provide the City with much need property tax revenue as well as land sale proceeds.
At the end of last year the City engaged a consultant to evaluate if charges paid by the water and sewer utilities were appropriate. Initial findings from that analysis have concluded that the amount of the General fund expenses being charged to these utilities is lower than what they should be. As a result, steps will be taken over the coming year to have those reimbursements increased to the corrected amounts.
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