pages: CityCouncil/2021-04-20.pdf, 24
This data as json
body | date | page | text | path |
---|---|---|---|---|
CityCouncil | 2021-04-20 | 24 | The City Manager responded the model will be used for scenarios; stated the model helps staff understand where the City is at today, where it will be moving and which factors affect positives and downsides; the model has shown, in the immediate term, the General Fund's susceptibility is not the General Fund itself, but more funds adding pressure due to needing support over time; pensions overall are a huge issue; the model shows pensions as a pinch point to continue monitoring through pension management. Mr. Morris stated long-term financial decisions will be helped by the model; the aggregation of the General Fund with a Special Revenue Fund helps provide the big picture; when a baseline forecast is complete at the end of the fiscal year, there will be more refinement; the model can then be used to show the various financial benefits and risks, Other Post-Employment Benefits (OPEB) and pension liabilities. Julio Morales, Urban Futures Inc., stated it is not always the General Fund; Special Revenue Funds are also a focus; pensions are a problem for everyone; staff can only help Council when the issue is recognized and ready to be addressed. Councilmember Herrera Spencer inquired whether assumptions used to come up with the numbers can be specified. Mr. Morris responded that he can provide the information; stated the assumptions are the drivers that go into the forecasting algorithms; he relies on Moody's Analytics to provide economic data; he is not an economist; Moody's Analytics goes down to the metropolitan statistical area level in creating economic forecast data for the long-term, which is beneficial due regions of California varying; the algorithms are developed by the economic data, the City's proprietary data, statistical analysis of the City's historic financial data and trend lines; there are customizable controls based on local knowledge to ensure the forecast represents understanding of the local economic outlook. Councilmember Herrera Spencer stated that she would like to see the assumptions; requested the annual operating surplus deficit page be displayed; expressed concerns about the forecast; noted that she will not be supporting the matter. Mr. Morris presented slide page 9. Councilmember Herrera Spencer expressed concern about the deficit showing an increase until 2023 with the amount decreasing until a surplus is shown in 2028; stated that she is concerned about the accuracy and the public thinking the City can spend money based on the turn in funding; she does not know what the assumptions were for revenue streams; the problem could be a longer and bigger issue, which will impact the City's revenue; she is unsure the City will come out of a deficit by 2024; the City has been using reserves significantly for pensions and OPEB; she has not supported using reserves; the report is a good start; however, she would have liked to see more information. Mr. Morris stated that he will share the information and provide the examples from the control panel; economics is a social science and is not a physical science; there is room for debate on the use of various revenue sources and whether to be aggressive, moderate or conservative; the City's reserve goes into a trust for OPEB liabilities and pensions; the use of reserves is not included in the forecast; part of the pension management strategy is to set money aside for said Regular Meeting Alameda City Council 19 April 20, 2021 | CityCouncil/2021-04-20.pdf |