Fiscal Year 2013-2015 Special Budget Meeting

Deanna J. Santana, City Administrator Subject: Proposed FY 13-15 Proposed Policy Budget Date: April 25, 2013 Page 3 internal and external auditors also often look at performance or management in addition to financial issues during audits. The Administration is also continually working on special projects to analyze and improve the performance of different imits, including as suggested by the Council. However, there is no unified, thorough way through which the City measures or audits and reports performance of all of its operations on an ongoing basis. To our knowledge, there has not been a thorough, structured evaluation of how effectively the City Council has met its priorities and the resources to support them. 4) Provide additional information on some of the key financial challenges that could affect the City, including unfunded liabilities in accrued leave, pension obligations, and negative funds, and how they are addressed in the budget. The City has a number of long-term liabilities, including related to pension obligations, other post-employment benefits (OPEB), negative funds, deferred capital, and paid leave accrual. The City has published a significant amount on information on the status and magnitude of these obligations over the past year. The Five-Year Financial Forecast contained a thorough listing and discussion of these liabilities. Other publications or presentations such as the Budget Outlook presentation to City Council and employee groups, various information memorandums, and others have provided detail. The proposed budget continues this effort of fully surfacing these issues so that they can be considered when appropriation decisions are made. The table below illustrates the unfunded and long-term liabilities the City faces over time. City of Oakland Long-Term Liabilities Unfiinded Amount Descriptions $743K Oakland Municipal Employees Retirement System (OMERS), closed retirement system, unfunded balance as of June 30, 2011 $743M California Public Employees Retirement System (Cal PERS), 75% funded. Unfunded balance as of June 30, 2011 $216M Police and Fire Retirement System (PFRS), closed retirement system, unfunded balance as of June 30, 2012 was $426M; issued a bond in July 2012, the current unfunded balance is $216M, will start the payment in FY 2017-18, $24.24M $520M Other Post-Employment Benefits (OPEB) has the unfunded actuarial accrued liability (UAAL) of $520M as of June 30, 2011 $29.5M Accrued leaves are funded at 28.7% level, which leaves approximately $29.5M unftmded as of June 30, 2012 (audited) - $111M Of the 173 funds, 54 has negative fund balance as of June 30, 2012 (audited). Of which, $85M is in the repayment schedule, $26M is not. Item: City Council April 30, 2013