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[Ad Hoc Committee on Pensions on April 11, 2024.]
HOC COMMITTEE PENSION TO ORDER.FIRST THEY GET APPROVAL OF MINUTES, SO MOVED.
THANK EVERYONE FOR COMING TODAY, THIS AFTERNOON, WE WILL CONTINUE OUR DISCUSSION ABOUT THE DOLLAR POLICE AND FIRE PENSION SYSTEM FUNDING CONDITION.
WE ARE COMMITTED TO FULFILL OUR FINANCIAL OBLIGATION AND ENSURE THE LONG TERM SOUNDNESS OF THE SYSTEM TO PROTECT THE PENSION BENEFIT.
ALL ACTED RETIRED MEMBERS IS IMPORTANT TO REMEMBER THAT OUR PRIMARY OBJECTIVE IS TO COMPLY WITH THE PENSION BOARD REQUIREMENT TO FULFILL THE FUNDING IN 30 YEARS.
SECOND TO THAT IS OUR OPPORTUNITY TO CONSIDER GOING FORWARD THE REQUIRE REQUIREMENT AND POSSIBLE TO DO MORE THAN REQUIRED BY CURRENT STATE LAW.
HOWEVER, WE MUST DO THAT IN A RESPONSIBLE WAY THAT CAN BE MANAGED WITH OUR OTHER COMMITMENT TO THE RESIDENT AND THE TAXPAYER OF DOLLARS.
BY SAYING THAT WHAT WE ARE SAYING HERE, THERE IS A CAVEAT WHAT WE'RE TRYING TO ACCOMPLISH, THE FUNDED SOUND RECREATIONAL PLAN THAT WE HAVE TO DO ACCORDING TO STATE LAW.
THERE IS A MECHANISM THAT WE CAN DO THAT.
NOW, THE ISSUE BEFORE US, WHAT CAN WE DO MORE BESIDE WHAT STATE, STATE LAW ASKS US.
AND THAT'S WHAT JACK ISLAND IS HERE TODAY, AND THAT'S WHAT THE COUNCIL MEMBERS HERE TODAY TO SEE WHAT WE CAN DO BEYOND THAT.
AND WE ARE HERE AS THE CITY COUNCIL, THE POLICY MAKER TO LISTEN TO MAKE SURE THAT WE DO HAVE A THIRD YEAR SOUND RESPIRATORY PLAN, BUT ALSO TO BE A GOOD STEWARD OF THE TAXPAYERS.
WITH THAT MRS. JACK IRELAND, YOU CAN DO YOUR PRESENTATION.
AS MR. ATKINS MENTIONED, MY NAME IS JACK ARLAND AND I'M CHIEF FINANCIAL OFFICER FOR THE CITY.
AND JUST WANNA MAKE SURE YOU'RE HEARING ME OKAY ON THE SOUND.
SO WE HAVE A PRESENTATION THAT WE WOULD LIKE TO WALK THROUGH TODAY, UM, AND STARTING ON PAGE TWO, JUST AS A PURPOSE, UH, TO PROVIDE YOU AN UPDATE ON THE CURRENT FUNDING SITUATION TO REVIEW CHIRON'S RECOMMENDATIONS THAT THEY BRIEF THIS COMMITTEE ON, ON FEBRUARY THE EIGHTH.
AND THEN, UH, CONSIDERATIONS OF, OF SOME IDEAS THAT WE HAVE RELATED TO A PLAN TO IMPROVE THE FUNDING.
SO ON SLIDE THREE, JUST AS BACKGROUND, I'LL QUICKLY GO THROUGH THIS.
UH, PRB, AS YOU KNOW, OVERSEES THE RETIREMENT SYSTEMS IN THE STATE TO ENSURE SOUNDNESS AND COMPLIANCE WITH STATE REQUIREMENTS.
THE GUIDELINES DO REQUIRE THAT CONTRIBUTIONS BE MADE IN A MANNER THAT'S SUFFICIENT TO COVER THE NORMAL COST AS WELL AS THE AMORTIZATION OF THE UNFUNDED LIABILITY.
AND IT SHOULD NOT EXCEED 30 YEARS AS OF JANUARY 1ST, 2023.
THE DALLAS POLICE AND FIRE PENSION FUND, UH, IS PROJECTED TO BE FULLY FUNDED IN 82 YEARS.
OBVIOUSLY WELL EXCEEDING THE 30 YEAR REQUIREMENT.
A FUNDING SOUNDNESS RESTORATION PLAN IS DUE TO BE SUBMITTED TO THE STATE IN SEPTEMBER OF 25.
BUT IN ADDITION TO THAT HOUSE BILL 31 58, UH, PUT ADDITIONAL REQUIREMENTS IN PLACE FOR A FUNDING PLAN TO BE SUBMITTED, UH, BY NOVEMBER OF THIS YEAR.
CITY STAFF CONTINUE TO WORK WITH, UH, THE DALLAS POLICE AND FIRE PENSION, UH, SYSTEM STAFF.
UH, WE WILL CONTINUE TO DO THAT AND WORK COOPERATIVELY TO TRY TO COME TO, UH, AN AGREEMENT ON A PLAN THAT WE WILL BE ABLE TO CONTINUE TO PRESENT AND UPDATE THIS COMMITTEE ON AS WE'RE MOVING FORWARD.
THE NEXT TWO SLIDES, UH, PROVIDE AN UPDATE OF SOME INFORMATION THAT HAS BEEN SHARED WITH YOU IN PREVIOUS MONTHS.
AGAIN, UH, THE JANUARY 1ST OF 23, UH, REPORT IS NOW AVAILABLE.
AND SO THE FAR RIGHT HAND BAR HAS BEEN ADDED TO THIS GRAPH SHOWING THAT, UH, THE PENSION FUND WILL BE FULLY FUNDED IN 82 YEARS, WHEREAS LAST YEAR'S PROJECTION WAS TO BE FULLY FUNDED IN 68 YEARS.
SO THE FUND HAS CONTINUED TO, TO HAVE THE CHALLENGES, UH, AND THAT'S WHY WE DEFINITELY NEED TO, UH, WORK
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ON THE FUNDING PLAN.ON SLIDE FIVE, YOU'LL SEE ANOTHER GRAPH THAT'S BEEN UPDATED FOR 23 AND WHAT YOU'LL SEE, UH, BETWEEN THE 22 AND 23 YEARS THAT THE ASSETS, UH, DID DECLINE SLIGHTLY AND THE LIABILITY DID INCREASE, UH, RESULTING IN AN INCREASE IN THE UNFUNDED ACTUARIAL LIABILITY FROM 3.04 BILLION TO 3.2 BILLION, OR AN INCREASE OF ABOUT $160 MILLION IN THE UNFUNDED ACTUARIAL LIABILITY THAT'S CHANGED THE FUNDING PERCENT FROM 41.3, WHICH IS THE BLACK, UH, LINE THAT GOES ACROSS.
UH, IN 22 WE WERE AT 41.1% FUNDED IN 23 THAT DROPPED TO 39.1% FUNDED.
SO MOVING AWAY FROM THAT, I WANNA TALK ABOUT, UH, CHIRON'S RECOMMENDATIONS FROM THE FEBRUARY THE EIGHTH, UH, AD HOC COMMITTEE MEETING.
AND THIS SLIDE IS LIFTED FROM THEIR PRESENTATION TO THE COMMITTEE, THEY HAD THREE, UH, ITEMS THAT THEY IDENTIFIED AS RECOMMENDATIONS.
ONE BEING TO ADOPT AN ACTUARILY DETERMINE CONTRIBUTION, SECOND, TO REDUCE THE EMPLOYEE CONTRIBUTION RATE AS FUNDING IMPROVES.
AND THIRD, TO PROVIDE SOME TYPE OF COLA EARLIER THAN THE CURRENT PROVISIONS PERMIT.
SO WHAT I WANNA POINT OUT ABOUT THIS IS ON THE FAR LEFT HAND SIDE, THE ACTUARILY DETERMINED CONTRIBUTION IS SOMETHING THAT WE'RE, UH, THAT WILL HELP US ACHIEVE THE REQUIREMENT OF THE PRB.
IT IS A WAY TO ENSURE THAT THE FUND IS FULLY FUNDED IN 30 YEARS.
IT SETS A STRUCTURE IN PLACE THAT WILL ALLOW US TO DO THAT.
SO THE FIRST, UH, BOX ON THE FAR, UH, LEFT HAND SIDE OF THE PAGE IS A REQUIREMENT.
IT'S A REQUIREMENT FOR US TO ACHIEVE 30 YEAR FUNDING.
THE MIDDLE BAR AND THE BAR ON THE RIGHT ARE TWO THINGS THAT ARE NOT REQUIRED.
UH, THEY COULD BE, UH, INCLUDED IN A PLAN, BUT THEY WILL EXCEED WHAT IS CURRENTLY REQUIRED IN STATE LAW.
BOTH OF THOSE WERE RECOMMENDATIONS BY, UH, CHIRON AS THEY LOOKED BEYOND JUST THE 30 YEAR FUNDING REQUIREMENT AND LOOKED AT, UH, OTHER THINGS THAT THEY THOUGHT WERE IMPORTANT FOR THE FUND AS THEY COMPARED THE FUND TO OTHER PENSION SYSTEMS. SO WHAT I'LL DO OVER THE NEXT SEVERAL PAGES IS JUST WALK THROUGH EACH OF THOSE THREE RECOMMENDATIONS FROM CHIRON.
SO ON SLIDE EIGHT, LET'S START WITH THE ACTUARILY DETERMINED CONTRIBUTION.
AND SO WE'VE IDENTIFIED, UH, THREE CORE ELEMENTS THAT MAKE UP THE A DC, THE FIRST ELEMENT BEING THE UNFUNDED ACTUARIAL LIABILITY.
SO WE HAVE AN UNFUNDED LIABILITY CURRENTLY OF $3.2 BILLION.
AND IT WOULD BASICALLY BE TO TAKE THAT UNFUNDED LIABILITY AND TO DETERMINE A FIXED AMORTIZATION SCHEDULE THAT WOULD BE AMORTIZED OVER 30 YEARS.
AND SO THERE'S DIFFERENT WAYS, OBVIOUSLY TO SET UP AN AMORTIZATION SCHEDULE THAT WE'LL ACHIEVE FULLY FUNDING IN 30 YEARS.
WE DON'T WANNA COMPLETELY BACKEND LOAD IT.
UH, YOU COULD, YOU COULD FRONT END LOAD IT, YOU COULD, YOU COULD SMOOTH IT OVER TIME.
THERE'S DIFFERENT WAYS TO DO THAT.
UH, AND SO CHIRON PRESENTED SOME FIVE DIFFERENT SCENARIOS OF HOW THEY, UH, WOULD APPROACH IT THAT THEY, UH, INCLUDED IN THEIR BRIEFING.
SO I DO WANNA POINT OUT ALSO THAT, UH, THIS WOULD BECOME A FIXED, ONCE WE SETTLE ON THE NUMBERS, IT DOES BECOME FIXED.
AND SO IT'LL BE A KNOWN PART OF OUR BUDGETS.
WHAT THAT, UH, AMORTIZATION IS FOR THIS ELEMENT OF THE A DC.
IF AT ANY POINT THAT WE CHOSE TO ISSUE PENSION OBLIGATION BONDS BECAUSE THE MARKET WAS RIGHT, OR IF THERE WAS THE OPPORTUNITY TO MONETIZE SOME TYPE OF ASSET, OR IF THERE WAS SOME OPPORTUNITY FOR ANY TYPE OF A CASH INFUSION FROM THE CITY, IT WOULD LOWER ELEMENT ONE, IT WOULD, WE WOULD RESET THAT AMORTIZATION BY A LARGE CASH INFUSION, WHICH WOULD THEN OBVIOUSLY LOWER THE CITY'S CONTRIBUTIONS ON YEARS GOING FORWARD AFTER THAT CASH INFUSION.
THE SECOND ELEMENT THAT'S IN THE MIDDLE OF THE PAGE IS THE NORMAL COST.
AND SO THAT'S THE COST ASSOCIATED WITH THE, UH, ACTIVE EMPLOYEES.
IT REFLECTS THE VALUE OF ANY ADDITIONAL ACCRUED LIABILITY THAT'S OCCURRING FROM OUR ACTIVE EMPLOYEE.
SO EVERY DAY THAT A, A FIREFIGHTER OR A POLICE OFFICER IS WORKING, THEY'RE CONTINUING TO ACCRUE LIABILITY FOR THE PLAN.
AND THE NORMAL COST IS, IS THE COST THAT WOULD BE ASSOCIATED WITH THIS YEAR'S ADDITIONAL LIABILITY.
THERE ARE THINGS THAT, UH, OBVIOUSLY AFFECT THAT.
AND SO THIS IS NOT A KNOWN NUMBER.
WE HAVE PROJECTIONS ON WHAT THAT IS.
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WE CHANGE THE NUMBER OF OFFICERS, IF WE CHANGE PAY, THERE'S DIFFERENT THINGS THAT WE WOULD DO THAT COULD TRIGGER A CHANGE IN THE NORMAL COST.UH, WHEN WE HIRE NEW OFFICERS, RIGHT NOW, I HAVE TO PLAN FOR A PENSION INCREASE OF 34.5%.
BUT GOING FORWARD, IF WE HAVE THE ELEMENT ONE FIXED WHEN WE ADD AN ADDITIONAL OFFICER, I'M ONLY ADDING THE COST ASSOCIATED WITH THE NORMAL COST.
WHETHER WE HIRE 500 MORE OFFICERS OR IF WE LOSE MORE OFFICERS.
THE, UH, UNFUNDED ACTUARIAL LIABILITY IS ALREADY FIXED COST IN ELEMENT ONE.
THE THIRD ELEMENT THAT WE'VE LAID OUT HERE IS ANY ADDITIONAL LAYERS FOR GAINS OR LOSSES.
SO THERE'S A LOT OF PROJECTIONS HERE, AND AS WE GO THROUGH TIME, WE OBVIOUSLY EXPERIENCE, UH, ASSET OR LIABILITY EXPERIENCE THAT DEVIATES FROM WHAT THE ASSUMPTIONS ARE.
UH, THE ASSUMPTIONS MIGHT CHANGE.
THERE COULD BE LOSSES OR GAINS.
UH, AND THOSE GET AMORTIZED ON ADDITIONAL LAYERS NOT TO BE ACHIEVED BY 2055, BUT THEY ARE ADDITIONAL LAYERS THAT GOT GET ADDED IN.
NONE OF THOSE WOULD BE ADDED IN FOR A PERIOD OF TIME, LONGER THAN 20 YEARS.
SO IF IN YEAR 2050 WE HAD A LOSS OR A GAIN THAT NEEDED TO BE AMORTIZED, IT WOULD HAVE A NEW 20 YEAR LAYER THAT GETS ADDED ON.
SO IT'S POSSIBLE THAT EVERY YEAR WE HAVE A, AN ADDITIONAL LAYER, BUT POSSIBLY NOT.
IT JUST DEPENDS ON WHAT THE ACTUAL EXPERIENCE IS.
SO WE WILL HAVE THE, UH, ELEMENT ONE TO ADDRESS OUR UNFUNDED LIABILITY.
WE WOULD HAVE ELEMENT TWO TO ADDRESS THE NORMAL COST, AND THEN WE WOULD HAVE ADDITIONAL LAYERS ADDED ON TO, UH, REFLECT ANY EXPERIENCE THAT DEVIATES FROM THE ASSUMPTIONS.
UM, CHIRON, AGAIN, IN THEIR PRESENTATION, AND I LIFTED THIS PAGE FROM THEIR PRESENTATION AS WELL.
THEY LAID OUT FIVE DIFFERENT, UH, SCENARIOS.
THEY IDENTIFIED THAT ALL OF THE SCENARIOS WERE REASONABLE.
THEY SAID THAT ALL FIVE OF THE SCENARIOS WILL ACHIEVE 30 YEAR FUNDING.
ALL FIVE OF THE SCENARIOS WOULD BE ACCEPTABLE TO THE PENSION REVIEW BOARD.
THEY STARTED ON THE FAR LEFT WITH THE TRADITIONAL MODEL, AND THAT WOULD BE WHERE WE WOULD CALCULATE THE A DC AND FULLY FUND IT IN THE FIRST YEAR, THAT WE WOULD IMMEDIATELY GO UP TO THE AMOUNT THAT'S NEEDED, UH, TO, TO, TO BE AT A LEVEL THAT WOULD TAKE CARE OF THE UNFUNDED LIABILITY AND THE NORMAL COST.
THEY PRESENTED FOUR ADDITIONAL, UH, SCENARIOS, UH, ONE WITH A THREE YEAR STEP UP, STEP DOWN.
SO THE FIRST THREE YEARS WE KIND OF PHASE UP.
AND THEN ON THE BACK END IN THE LAST THREE YEARS, WE WOULD PHASE DOWN.
THEY DID THE SAME THING WITH A FIVE YEAR PHASE UP AND A FIVE YEAR PHASE DOWN.
AND THEN THE LAST TWO SCENARIOS WERE A THREE YEAR STEP UP, NO STEP DOWN OR A FIVE YEAR STEP UP, NO STEP DOWN.
UH, MS GOTCHU, UH, PRESENTED TO THE PENSION BOARD THIS MORNING AND, UH, AND EXPRESSED THAT, UH, HER PREFERRED, UH, OPTIONS, I BELIEVE WOULD BE EITHER THE TRADITIONAL OPTION OR THE THREE YEAR STEP UP.
UH, I DO BELIEVE THAT KELLY EXPRESSED THAT SHE UNDERSTANDS THE, THE COMPLICATIONS THAT IT WOULD CAUSE FOR THE CITY TO GO TO THE TRADITIONAL.
BUT, AND I AGREE IF WE HAD ALL THE MONEY AND MONEY WASN'T A QUESTION, THAT THAT MIGHT BE THE APPROACH THAT WE WOULD RECOMMEND, BUT WE HAVE OTHER THINGS THAT WE, WE NEED TO BE THINKING ABOUT AND, AND ALSO BE RESPONSIBLE FOR.
SO I THINK WE WILL NEED TO CONSIDER ONE OF THE OTHER SCENARIOS BESIDES THE TRADITIONAL.
SO ON THE NEXT SLIDE, SLIDE 10, IT'S A WHOLE LOT OF NUMBERS.
AND SO WHAT WE DID, WE TOOK THE CHIRON'S PRESENTATION THAT SPOKE MOSTLY IN PERCENTAGES, PERCENTAGE CHANGE, PERCENTAGE OF CONTRIBUTION.
AND HONESTLY, THAT'S HARD FOR ME TO UNDERSTAND BECAUSE I'M ALWAYS THINKING WHAT DO I NEED TO ADD TO NEXT YEAR'S BUDGET? 'CAUSE I, I TYPICALLY HAVE THIS YEAR'S BUDGET THAT WE USE AS A BASE FOR WHERE WE START.
AND SO WHAT DO I NEED TO ADD TO NEXT YEAR'S BUDGET TO FUND ONE OF THESE SCENARIOS? SO WHAT YOU'LL SEE IS IN THE CURRENT YEAR, IN FISCAL YEAR 24, THE TOP ROW, WE HAVE $184.7 MILLION BUDGETED FOR PENSION CONTRIBUTION.
NOW, IN MOST YEARS, IF WE HAVE LESS EMPLOYEES, WE DON'T PAY BECAUSE WE PAY BASED ON WHAT THE SALARIES ARE.
I'M PROPOSING AND, AND HAVE SAID TO, UH, KELLY THAT I THINK WE SHOULD GO AHEAD AND MAKE THAT FULL CONTRIBUTION THIS YEAR OF 184.7,
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EVEN IF OUR ACTUAL EXPERIENCE, WE HAVE FEWER OFFICERS FROM VACANCIES, THEREFORE WE COULD HAVE SOME SAVINGS FROM THAT.BUT WE NEED TO GO AHEAD AND BE PUTTING, IN MY OPINION, THE FULL 180, UH, $5 MILLION INTO THE FUND THIS YEAR.
AND SO ALL OF THESE SCENARIOS WORK WITH THAT AS A STARTING PLACE.
SO, UH, THE SCENARIO ON THE FAR LEFT AGAIN IS, UH, CHIRON'S RECOMMENDATION FOR A TRADITIONAL A DC SCENARIO THAT WOULD GO FROM $184.7 MILLION IN 24 TO NEXT FISCAL YEAR, IT WOULD GO UP TO $251.4 MILLION.
SO NEXT TO IT, YOU'LL SEE A YEAR OVER YEAR CHANGE.
AGAIN, THAT'S THE WAY MY BRAIN WORKS ON WHAT DO I NEED TO ADD TO NEXT YEAR'S BUDGET? I WOULD NEED TO ADD $66.7 MILLION JUST FOR PENSION FOR NEXT YEAR.
UH, THE FOLLOWING YEAR, YOU WILL SEE THAT THE THE STEPS UP CONTINUE TO STEP UP BECAUSE THE NORMAL COST WILL CONTINUE TO GO UP AS OFFICERS ARE ASSUMED TO HAVE PAY INCREASES AND THINGS LIKE THAT ARE FACTORED IN.
SO YOU'LL CONTINUE TO SEE, UH, THE, THE CONTRIBUTION GOING UP, BUT IT'S ONLY GOING UP IN THE 5.5 $5.86 MILLION RANGE.
SO THE SECOND SET OF NUMBERS ARE THE THREE YEAR STEP UP AND STEP DOWN SCENARIO.
UH, YOU'LL SEE THAT THE FIRST THREE YEARS, UH, JUMP UP BY 26.8 MILLION, 27 MILLION AND THEN $28 MILLION.
AND THEN IT BECOMES MORE OF A MANAGEABLE NUMBER OF THE YEAR OVER YEAR OF ABOUT $5 MILLION, $6 MILLION GROWTH.
AND YOU'LL SEE DOWN AT THE BOTTOM OF THAT COLUMN WHERE IT DROPS OFF BY 32 MILLION, IT'S A $34 MILLION DECREASE, A $36 MILLION INCREASE DECREASE.
AND THEN ONCE WE'VE PAID OFF THE AMORTIZATION OF THE UNFUNDED LIABILITY, WE GO TO JUST A STRICTLY, UH, UH, UM, I'M SORRY, WE, WE GO STRAIGHT TO THE NORMAL COST IN ANY ADDITIONAL LAYERS THAT HAVE BEEN ADDED ON.
SO YOU, YOU SEE STEP UPS AND YOU SEE STEP DOWNS IN THE THIRD SET OF NUMBERS, YOU SEE SOMETHING SIMILAR, BUT IT IS ON A FIVE YEAR STEP UP AND A FIVE YEAR STEP DOWN BASIS.
THE FOURTH SET OF NUMBERS IS, UH, A THREE YEAR STEP UP WITH NO STEP DOWN.
AND THE LAST SET OF NUMBERS ON THE RIGHT HAND SIDE IS THE FIVE YEAR STEP UP WITH NO STEP DOWN.
SO THE NET PRESENT VALUE OF ALL OF THE SCENARIOS ARE, ARE REALLY THE SAME.
WE, WE ARE GETTING TO THE SAME PLACE IN THE END, IT'S JUST HOW DO WE GET THERE? UH, DO WE WANT TO COMPLETELY FRONT END LOAD IT AND COME UP WITH AN EXTRA $67 MILLION NEXT YEAR AND THEN ADD TO THAT ANOTHER $5 MILLION THE FOLLOWING YEAR? OR DO WE WANT TO STEP UP TO THAT? UM, MY CONVERSATIONS WITH, UH, KELLY HAVE BEEN THAT OUR RECOMMENDATION FROM A CITY MANAGEMENT PERSPECTIVE WOULD BE THAT WE WOULD DO SOME TYPE OF STEP UP, PROBABLY THE, UH, SCENARIO ON THE, THE FAR RIGHT, WHICH IS A FIVE YEAR STEP UP THAT STEPS UP 17 TO $18 MILLION, THE $19 MILLION AND $20 MILLION.
THE REASON I, THAT'S MY PREFERRED IS NOT BECAUSE I'M TRYING TO HOLD OUT MONEY FROM THE PENSION FUND, IT'S BECAUSE I WANT TO BE AWARE AND MAKE Y'ALL AWARE OF OTHER COSTS THAT THE CITY HAVE TO MANAGE BECAUSE THIS IS NOT THE ONLY COST INCREASE THAT WE WILL BE, UH, DEALING WITH THROUGH THE BUDGET PROCESS THIS YEAR OR THE NEXT SEVERAL YEARS.
UH, IT'S ONE THAT IS OBVIOUSLY ONE OF OUR MOST IMPORTANT COSTS THAT WE MUST ADDRESS.
UH, BUT I THINK WE NEED TO DO IT IN A RESPONSIBLE WAY THAT ALLOWS US TO STEP INTO IT OVER TIME.
UH, OUR NEW CONSTRUCTION ALONE IS GENERATING, YOU KNOW, $20 MILLION A YEAR.
AND SO THAT'S A WAY THAT MAYBE THAT'S SOMETHING THAT, THAT WILL HELP US BECAUSE WE, WE DO HAVE THAT NEW CONSTRUCTION THAT IS NOT CAPPED BY THE STATE LAW ON OUR PROPERTY TAX GROWTH.
UH, WE HAVE ASSUMED IN NEXT YEAR'S BUDGET AN INCREASE TO 190 MILLION.
SO I'VE ALREADY GOT IN THE PLANNED BUDGET FOR THE SECOND YEAR, $6 MILLION, BUT ANYTHING ABOVE THAT IS GOING TO BE SOMETHING THAT IS NOT IN THE FISCAL YEAR 25 PLANNED BUDGET THAT WE BALANCED LAST SUMMER.
THAT IS OUR STARTING POINT FOR NEXT YEAR.
SO IF, IF WE DO THE SCENARIO ON THE FAR RIGHT HAND SIDE, I'VE ALREADY GOT 6 MILLION, I NEED TO COME UP WITH ANOTHER 11 THE FOLLOWING YEAR, I NEED TO COME UP WITH 18 THE FOLLOWING YEAR, 18 MORE.
THESE ARE CUMULATIVE NUMBERS THAT KEEP GROWING.
SO I, I DO AGAIN, WANNA SAY THAT I BELIEVE KELLY'S PREFERENCE WAS THE TRADITIONAL OR THE THREE YEAR STEP UP.
BUT I, I THINK FROM OUR PERSPECTIVE, UH, THE, THE FAR RIGHT, THE FIVE YEAR STEP UP IS, UH, AN APPROACH THAT WE COULD MANAGE BETTER WITHIN OUR BUDGET.
[00:20:01]
ACCORDING TO CHIRON, ALL FIVE OF THE SCENARIOS ARE REASONABLE AND DO MEET THE PENSION REVIEW BOARD'S REQUIREMENTS TO BE FULLY FUNDED IN 30 YEARS.THERE'S OBVIOUSLY AN UNLIMITED NUMBER OF WAYS THAT THIS COULD BE SLICED AND DICED, BUT THIS WAS FIVE AND THEY ARE, UH, GIVE US SOME GOOD OPTIONS TO WORK FROM.
UM, AND AGAIN, AN IMMEDIATE IMPLEMENTATION OF THE A DC WILL REQUIRE AN INCREASE OF $67 MILLION.
IT DOES RESULT IN GREATER CASH INTO THE FUND RIGHT AWAY, BUT IT WILL REQUIRE US TO MAKE THE HARDER DECISIONS, UH, REGARDING HOW WE WOULD ACCOMPLISH THAT.
AGAIN, JUST THE STEP UP AND STEP DOWN SCENARIOS, UH, DO REQUIRE GREATER AMOUNTS OF FUNDING IN THE EARLY YEARS, BUT THEY ALLOW FOR STEP DOWN IN THE LAST THREE TO FIVE YEARS.
THE STEP UP WITH NO STEP DOWN INCREASES AT A SLOWER RATE.
UH, BUT IT STILL ACHIEVES THE 30 YEAR FUNDING.
UH, ANY OF THOSE FOUR SCENARIOS.
THE STEP UP, STEP DOWN ARE JUST THE STEP UP.
UH, DO PROVIDE US WITH MORE FLEXIBILITY THAN THE TRADITIONAL METHOD DOES, UH, ANY, AGAIN, ANY FUTURE, UH, CASH INFUSIONS WOULD REDUCE THAT ELEMENT ONE.
SO GONNA MOVE A LITTLE BIT AWAY FROM THE A DC CONVERSATION AND MOVE TO THE SECOND ITEM THAT CHIRON RECOMMENDED.
AGAIN, OUR UNDERSTANDING IS THAT THIS WOULD BE ABOVE AND BEYOND WHAT IS REQUIRED BY HOUSE BILL 31 58.
UH, WE'RE REQUIRED TO BE FULLY FUNDED IN 30 YEARS, BUT WE'RE NOT REQUIRED TO AT THIS POINT IN TIME TO REDUCE THE EMPLOYEE CONTRIBUTION RATE.
UH, RIGHT NOW, THE WAY THINGS STAND, WE WOULD REDUCE THE EMPLOYEE CONTRIBUTION RATE ONCE WE GET TO, UH, A HUNDRED PERCENT FUNDED.
UH, SO IT IS BUILT IN THAT WE WOULD REDUCE, UH, THE EMPLOYEE CONTRIBUTION RATE WHERE THEY WERE THEN BE, UH, DOWN TO, UH, 50% OF THE NORMAL COST.
UH, CHIRON SUGGESTED THAT WE DO THAT EARLIER RATHER THAN LATER, RATHER THAN WAITING UNTIL WE'RE A HUNDRED PERCENT FUNDED, THEY SUGGESTED THAT WE BEGIN TRANSITIONING TO THAT IN 2039.
THAT STILL REQUIRES THE SAME AMOUNT OF MONEY TO GO INTO THE FUND.
SO IF THE EMPLOYEE'S NOT CONTRIBUTING AS MUCH, THE CITY CONTRIBUTES MORE.
SO IF WE START REDUCING EARLIER FOR THE EMPLOYEES, THE CITY'S NUMBERS WILL BE HIGHER THAN WERE ON THE PREVIOUS PAGES.
UM, I, WE OBVIOUSLY WANT TO REDUCE THE CONTRIBUTIONS FOR THE EMPLOYEES IN THE FUTURE, BUT IT'S NOT SOMETHING THAT WE THINK SHOULD BE BUILT IN TO THE, UH, SCENARIOS AT THIS POINT OR INTO THE PLAN AT THIS POINT.
UH, IN CONVERSATIONS, UH, BOTH WITH MS. SHAW AND, UH, THE CHAIR OF THE BOARD, THIS IS A LOWER PRIORITY FOR THEM AND SOMETHING THAT THEY'RE NOT RECOMMENDING IT TO THEIR BOARD AT THIS TIME EITHER.
SO I THINK WE'RE ON THE SAME PAGE ON THAT PARTICULAR CHIRON RECOMMENDATION.
SO MOVING ON TO THE THIRD THING THAT CHIRON PUT ON THE TABLE AS A RECOMMENDATION, AGAIN, THIS NOT BEING SOMETHING THAT IS REQUIRED BY HOUSE BILL 31 58, IT WOULD BE ABOVE AND BEYOND 'CAUSE HOUSE BILL 31 58 DID ADDRESS THE COLA.
YOU CAN SEE ON SLIDE 16 THAT PRIOR TO HOUSE BILL 31 58, THAT THERE WERE AUTOMATIC 4% COLAS FOR INDIVIDUALS HIRED, UH, PRIOR TO JANUARY 1ST, 2007, THAT CHANGED TO AN AD HOC COLA.
UP TO 4% HAVE HIRED AFTER THAT POINT.
UM, UH, THE, THE DROP ACCOUNTS ARE NOT PART OF THE, UH, COLA CALCULATION.
THEY WERE GETTING, UH, RETURN, UH, GUARANTEED RETURNS ON THEIR DROP ACCOUNTS, BUT IT WAS NOT PART OF THE COLA UH, CALCULATIONS.
AFTER HOUSE BILL 31 58 CHANGES WERE PUT IN PLACE THAT, UH, COLA WOULD NOT BE AVAILABLE TO THE RETIREES UNTIL THE FUND WAS 70% FUNDED.
SO THE, UH, PRIOR EVALUATION REPORTS PROJECTED THAT OUT TO 27 3, SO NEARLY 50 YEARS OUT.
BUT BY IMPLEMENTING ONE OF THE SCENARIOS THAT IMPROVE THE FUNDING PUTS US ON A PATH TO BE FULLY FUNDED IN 30 YEARS, IT MOVES THAT PROJECTED DATE FOR WHEN THE FUND WOULD ACHIEVE 70% UP TO, UH, 2046.
SO IT MOVES IT UP SIGNIFICANTLY, BUT 2046 IS STILL 22 YEARS AWAY.
SO ACKNOWLEDGING THAT THAT'S, THAT'S, UH, A WAYS OUT THERE.
AND THE RETIREES HAVE CURRENTLY GONE SINCE 2016 WITHOUT A COLA.
AND I PUT IN A TABLE ON THE SIDE THAT JUST SHOWS THE COLAS THAT THEY DID GET GOING BACK TO 2001 AND HOW THEY WERE GETTING THE 4%.
AND THEN YOU'LL SEE IN 2017 THAT THE COLA STOPPED AND THEY ARE SUSPENDED UNTIL THE FUND AGAIN REACHES 70%.
SO ALTHOUGH THE COLA IS, UH, AN AD HOC COLA THAT WOULDN'T BE, UH, BASED ON THESE
[00:25:01]
PROJECTIONS NOT COME INTO PLAY UNTIL 2046, THE NUMBERS THAT WE'RE AMORTIZING INCLUDE THE COST OF THOSE FUTURE COALS.SO, UH, PART OF THE, UH, AMORTIZATION OF THE UNFUNDED LIABILITY THAT WE WOULD START PAYING RIGHT AWAY DOES INCLUDE COSTS THAT GOES TOWARD THOSE FUTURE COALS.
THAT'S JUST BECAUSE IT'S IN THE ACTUARIAL ASSUMPTIONS AND IT'S PART OF THAT UNFUNDED ACTUARIAL LIABILITY, AND THEREFORE YOU AMORTIZE IT OVER 30 YEARS AND START PAYING ON IT.
UH, NOW, UM, SO, UM, MOVING ON TO PAGE 17.
YOU'LL SEE, UH, SIX SCENARIOS THAT OR OPTIONS THAT CHIRON LAID OUT FOR POTENTIAL CHANGES TO THE COLA.
UH, AND THE, THIS, AGAIN, I GIVE THEM CREDIT.
I LIFTED IT FROM THEIR PRESENTATION.
UH, AND SO IT SHOWS, UH, CHANGING THE COLA TO SOMETHING THAT REPLICATES WHAT THE EMPLOYEE RETIREMENT FUND COLA IS OR CHANGING FROM A, A COLA THAT IS BASED ON 70%, UH, FUNDING, DOING SOMETHING IMMEDIATE AND PARTIAL.
SO IN, IF WE ARE 39% FUNDED NOW, IT WOULD BASICALLY BE 39% OF 1.5 COLA.
SO IT'S, IT'S A MUCH SMALLER COLA, BUT IT'S A COLA.
ONCE THE FUND WAS 45%, THEN IT, THEY WOULD GET 45% OF A 1.5% COLA.
ONE THING I DID NOT LIKE ABOUT THIS IS BECAUSE THEY CHANGED IT.
RIGHT? NOW, ONCE THE FUND IS 70% FUNDED, YOU GET THE 1.5 ONCE UNDER THIS SCENARIO, IT ACTUALLY REDUCES THAT BENEFIT.
ONCE YOU'RE 70% FUNDED, YOU WOULD ONLY GET 70% OF 1.5 OR 71% OF 1.5.
IT'S NOT UNTIL WE'RE FULLY FUNDED AT A HUNDRED PERCENT WOULD THEY ACTUALLY GET THE, THE 1.5% COLA.
SO I FELT THAT THIS ONE KIND OF STEPPED BACK A LITTLE BIT.
UM, BUT IT DOES GIVE MUCH SMALLER COLAS SOONER.
UH, YOU CAN SEE THEY, THEY LAID OUT OTHER THINGS, UH, BASED ON, AND THE PP AND THE, THE TITLES ARE BASED ON PURCHASING POWER.
THEY SPENT A LOT OF TIME AT THEIR LAST PRESENTATION WITH, UH, THIS COMMITTEE TALKING ABOUT HOW THE PURCHASING POWER OF A RETIREE HAS BEEN ERODED BECAUSE OF, UH, INFLATION HAS GONE UP.
BUT, UH, THE COLAS HAVE NOT KEPT UP WITH THAT AND LOOKED AT SOME WAY OF TRYING TO, UH, KEEP UP WITH, UH, THE PURCHASING POWER.
THAT IS NOT A CONCEPT THAT, UH, I AM AWARE THAT OTHERS USE.
UH, IT'S NOT A, A, A MODEL THAT WE USE FOR OUR ACTIVE EMPLOYEES.
UM, WE, WE DON'T TARGET TRYING TO KEEP UP WITH CPI, UH, FOR OUR ACTIVE EMPLOYEES.
AND, AND I'M NOT AWARE OF, OF WHERE THEY PULLED THIS FROM.
IT'S AN INTERESTING IDEA, BUT IT'S, UH, IT'S NOT SOMETHING THAT I THINK IS A VERY COMMON APPROACH.
UH, AGAIN, ALL OF THE APPROACHES THOUGH, DO PROVIDE SOME TYPE OF COLA.
THERE'S A WHOLE LOT OF NUMBERS ON THIS PAGE.
AND I TOOK CHIRON'S PREVIOUS PAGE AND THEY GAVE ME THEIR SPREADSHEETS AND I WORKED THROUGH, UH, LOOKING AT WHAT THOSE WOULD COST.
AND SO THE COLUMN ON THE FAR LEFT IS I MENTIONED A FEW MINUTES AGO THAT WE'RE CURRENTLY CONTRIBUTING TO THE COLA THAT'S IN NOW THE COLA'S NOT BECOMING ELIGIBLE UNTIL 2046 AND THEY'RE 1.5, UH, PERCENT COLAS, UH, THAT IS AMORTIZED OVER 30 YEARS.
AND WE'RE, THIS IS THE AMOUNT THAT WE WILL BE PUTTING IN THAT GOES TOWARD THOSE FUTURE COLAS.
SO WE'RE ALREADY PAYING TOWARD THE FUTURE COLAS.
THE SECOND COLUMN IS THE BASIS THAT CHIRON USED.
THEY HAD TO PICK ONE OF THE MANY SCENARIOS IS WHAT THEY WERE GONNA WORK OFF OF.
THEY WORKED OFF OF THE FIVE YEAR STEP UP, STEP DOWN.
AND EACH OF THE SCENARIOS, UH, THAT THEY LAID OUT OR CONSIDERATIONS THAT THEY LAID OUT, UH, ARE, ARE PRESENTED HERE ON THIS PAGE.
AND I JUST SIMPLY DID A VARIANCE FROM, UH, THE FIVE YEAR STEP UP, STEP DOWN THAT INCLUDES A 1.5% COLA WHEN WE'RE 70 PER PERCENT FUNDED.
HOW DOES THAT COMPARE TO THESE OTHER, UH, COLA SCENARIOS AND WHAT'S THE COST DIFFERENCE IF WE IMPLEMENT ONE OF THESE SCENARIOS VERSUS THE, THE 1.5? AND, AND SO THAT'S, THAT'S WHAT'S SHOWN ON THIS PAGE.
UH, MS. SHAW AND I HAVE ALSO HAD CONVERSATIONS WITH CHIRON AND ASKED THEM TO LOOK AT DIFFERENT SCENARIOS AND, AND THEY'VE DONE THAT.
THEY PUT DIFFERENT THINGS TOGETHER.
UM, AND SOME OF THOSE WERE IN, IN KELLY'S PRESENTATION THIS MORNING.
ONE THING THAT WAS ONLY BROUGHT UP, UH, EARLIER THIS WEEK.
AND SO, AND I THINK SHE MENTIONED THAT, THAT WE JUST HAD THE FIRST CONVERSATION ABOUT THIS ON TUESDAY IS ON PAGE 19 IS WHAT IF WE DID SOME TYPE OF ONE TIME COLA NOW? SO IF IN 2025, FOR EXAMPLE, COULD WE
[00:30:01]
DO A ONE-TIME COLA? AND SO THAT'S PART OF THE REASON THAT I'M MORE INTERESTED IN ONE OF THE BASE A DC, UH, OPTIONS THAT HAS THE SMALLER AMOUNTS OF STEP UP BECAUSE MAYBE WE CAN LAYER ON TOP OF THAT, UH, ONE TIME COLA NOW BECAUSE THEY'VE GONE, UH, YOU KNOW, SINCE 2016 WITHOUT A COLA.SO COULD WE DO SOME TYPE OF COLA NOW? AND WHAT WE, UH, DELOITTE MODELED THESE FOR ME, THESE ARE NOT CHIRON'S NUMBERS OR KELLY'S NUMBERS.
DELOITTE DID THESE NUMBERS AND JUST WHAT IS A 1% COLA COST PER YEAR? WHAT IS A 2% COLA COST PER YEAR? 3%, 4%.
IT MAY NOT BE A LOT ON THE FIRST YEAR, BUT IT DOES BECOME CUMULATIVE AS YOU GO.
UM, IT, AGAIN, THIS IS JUST A ONE TIME, SO THEIR BASE WOULD GO UP ONE TIME.
UH, BUT THEN AS WE GO THROUGH, UH, TIME, UH, ONCE WE'RE OUT IN THE FUTURE YEARS, AND THE 1.5% COLA KICKS IN, IT'S BEING CALCULATED OFF OF THIS NEW BASE THAT STEPS UP ONE TIME IN 2025.
SO WHEN I DID, UH, BRING IT UP TO KELLY, SHE HAD AN AMAZING POINT THAT I THOUGHT AND I REALLY APPRECIATE.
AND, UH, JUST TO, TO RECOGNIZE THAT, UH, MAYBE WE DO IT WHERE THERE'S SOME LEVEL OF RETI, UH, BEING IN RETIREMENT BEFORE YOU GET IT.
SO MAYBE YOU HAVE TO BE IN RETIREMENT THREE YEARS BEFORE YOU GET IT, BECAUSE OTHERWISE, IF WE JUST GIVE IT IN 2025, SOME, UH, INDIVIDUALS THAT ARE ON THE BUBBLE MIGHT TAKE THAT AS, OKAY, I WANT TO GO AHEAD AND STEP OUT THE DOOR NOW ON THAT.
SO MAYBE IF SOMEBODY STAYS UNTIL 2026, THEY WOULD GET IT THREE YEARS LATER IN 2029, OR IF SOMEBODY LEAVES IN 2030, THEN MAYBE THEY WOULD GET IT IN 2033.
AND WE WOULD DO SOMETHING FOR SOMEONE WHO IS, UH, CURRENTLY RETIRED OBVIOUSLY, BUT THEN THE FUTURE RETIREES BETWEEN NOW AND 2046.
UH, BEING ABLE TO DO SOMETHING, UH, IN THE WAY OF A COLA BEFORE WE GET TO THE 70% FUNDING LEVEL.
SO JUST NUMBERS THERE RELATED TO WHAT THAT, THAT COULD COST.
UH, AND THIS IS ASSUMING GIVING, UH, EVERYTHING IN 2025, UH, AND WHAT THAT COST WOULD BE FOR, UH, 1%, 2%, 3% OR 4%.
BUT AGAIN, THIS WOULD BE A ONE TIME COLA THAT DOES NOT REPEAT ITSELF.
THE BASE WOULD GO UP FOR EACH RETIREE, BUT THEY WOULD NOT BE GETTING ADDITIONAL COLAS UNTIL WE WERE 70% FUNDED ON SLIDE.
UH, AND, AND THAT'S JUST SOMETHING FOR CONSIDERATION.
IT, IT'S NOT A RECOMMENDATION, IT'S JUST, YOU KNOW, WE'RE, WE'RE TRYING TO THINK OF DIFFERENT WAYS WHERE WE COULD PUT SOMETHING OUT THERE BECAUSE I KNOW THERE'S, UH, A LOT OF, UH, CONCERN OVER NOT HAVING SOMETHING FOR SO MANY YEARS.
SLIDE 20, UH, AS OPPOSED TO DOING A COLA, UH, MAYBE A SUPPLEMENTAL PAY OR A STIPEND OR A 13TH CHECK.
UH, SO WHAT WE'VE GOT HERE ARE NUMBERS RELATED TO DOING A 13TH CHECK.
A 13TH CHECK IS THE VALUE OF ABOUT AN 8%, 8.3%, UH, PAY INCREASE.
IT WOULD BE LIKE A ONE-TIME BONUS.
UH, OUR RECOMMENDATION WOULD BE FOR ANY OF THOSE TYPES OF ONE-TIME, BONUSES OR STIPENDS OR SUPPLEMENTAL PAY TO BE BASED ON, UH, RATE OF RETURN.
WE DON'T WANNA BE IN A SITUATION, IN OUR OPINION, THAT WE WOULD GIVE A STIPEND IN A YEAR THAT THE FUND IS NOT PERFORMING, AT LEAST AT THE 6.5% LEVEL.
THAT'S IN THE ACTUARIAL ASSUMPTIONS.
WE DON'T WANNA GIVE A COLA IF THE FUND HAS A BAD YEAR AND LOSES MONEY, AND WHICH IS PERFECTLY UNDERSTANDABLE.
THAT HAPPENS OVER THE COURSE OF TIME.
YOU'RE GOING TO SEE THE FUND HAVE LOSSES SOME YEARS AND GAIN SOME YEARS.
THE EXPECTATION IS THAT WE AVERAGE OUT AT 6.5% KNOWING THAT THERE'S GONNA BE GAINS AND LOSSES, AND WE'RE GONNA AVERAGE AT 6.5.
SO WE WOULD NOT WANT TO DO A STIPEND UNLESS WE WERE AT LEAST AT THE 6.5% THRESHOLD OR SOME HIGHER AMOUNT, WHETHER IT'S 7% OR SEVEN POINT A HALF.
BUT IT WOULD BE ONLY IN THOSE YEARS WHERE THAT THRESHOLD WAS MEL MET ANOTHER CONSIDERATION, UM, FOR SOME TYPE OF BONUS OR SUPPLEMENTAL PAY.
UH, AND THIS IS AN INTERESTING, UH, UH, FORMULA THAT, UH, MS. SCOTT SHAW, UH, UH, DEVELOPED AS TO LOOK AT SOMETHING THAT IS BASED ON A FORMULA OF $5 PER YEAR TIMES THE NUMBER OF YEARS OF SERVICE TIMES THE YEAR SINCE RETIREMENT.
AND SO THAT RECOGNIZES, IF YOU WORK FOR THE CITY FOR A LONGER PERIOD OF TIME, YOUR CAL, YOUR FORMULA WOULD RESULT IN A BIGGER NUMBER.
IF YOU'VE BEEN RE RETIRED FOR A LONGER PERIOD OF TIME, IT WOULD BE BASED, THAT WOULD IMPROVE YOUR NUMBER.
UM, HOWEVER, THE, THEIR PROPOSAL WOULD BE TO DO THAT EVERY SINGLE YEAR REGARDLESS, MAKE IT AUTOMATIC.
AND SO, AGAIN, OUR RECOMMENDATION IS THAT WE WOULD MAKE ANY TYPE OF THING ON A SUPPLEMENTAL PAY TO BE TO CONTINGENT UPON AT LEAST MEETING THAT 6.5 UH, PERCENT THRESHOLD
[00:35:01]
BECAUSE OTHERWISE, UM, SIMILAR TO DROP OR OLD DAYS WHEN YOU WERE GIVING COLAS WHEN THERE WAS UNDERPERFORMING, UH, AGAIN, I DO KNOW THAT'S GONNA HAPPEN.I JUST WANT TO, UH, I WOULD RECOMMEND THAT ANY TYPE OF SUPPLEMENTAL PAY BE CONTINGENT UPON PERFORMANCE.
SO, UH, MOVING ON PAST THAT AND BEFORE I MOVE ON, I'LL SAY WE'RE CONTINUING TO GO THROUGH THINGS, UH, GOOD PARTNERS, I WANNA CONTINUE TO PARTNER WITH THEM.
I KNOW MR. ATKINS HAS HAD, UH, MANY CONVERSATIONS WITH, UH, NICK, THE, THE BOARD OF THE, OR THE CHAIR OF THE BOARD, AND WE APPRECIATE THEIR PARTNERSHIP AND I THINK WE'LL GET THERE, UH, AS WE CONTINUE TO WORK THROUGH THIS.
UM, SO, UM, WE WILL, WE WILL TAKE FEEDBACK TODAY OBVIOUSLY, AND CONTINUE TO WORK FORWARD.
BEFORE WE DO THAT, I DO HAVE AN ADDITIONAL SLIDE ON, UH, NUMBER 23 THAT I, I DO WANT TO POINT OUT AND, AND, UH, SOME THINGS FOR YOUR CONSIDERATION.
SO RIGHT NOW, OUR, UH, CITY OVERSIGHT IS THROUGH THE SIX, UH, OF THE 11 BOARD MEMBERS THAT ARE APPOINTED BY THE MAYOR.
AND, AND THAT IS A MAJORITY OF THE BOARD OBVIOUSLY, BUT I DO RECOGNIZE WHEN SOMEONE IS ON THE BOARD, THEIR FIDUCIARY RESPONSIBILITY IS THE FUND.
THEIR REDUCE FIDUCIARY RESPONSIBILITY IS NOT TO THE CITY'S GENERAL FUND.
AND SO, UM, SOMETHING FOR YOUR CONSIDERATION, ARE THERE THINGS THAT YOU WANT TO DO THAT MAY ADD ADDITIONAL OVERSIGHT? UH, SOME ADDITIONAL OVERSIGHT COULD BE RELATED TO, UH, WHEN AD HOC COLAS ARE PUT IN PLACE OR IF THERE'S A CHANGE IN BENEFITS, AN INCREASE IN BENEFITS, OR IF THERE'S A CHANGE IN CERTAIN TYPES OF ACTUARIAL ASSUMPTIONS THAT WOULD INCREASE OUR LIABILITY.
BECAUSE RIGHT NOW, IF ALL OF THOSE THINGS ARE AT THE DECISION OF THE BOARD, THEN THE CITY WILL PAY ACCORDINGLY.
AND I'M JUST CONCERNED ABOUT WHAT TYPE OF COST THERE COULD BE.
AND I APPRECIATE THE WORK OF THE NEW BOARD AND THEY'VE DONE AN, UM, A GREAT JOB OF CHANGING THINGS AT THE FUND.
BUT FOR PROTECTION SAKE, DOES THIS COUNCIL WANT TO HAVE ADDITIONAL THINGS IN PLACE THAT WOULD, WOULD PROVIDE SOME ADDITIONAL OVERSIGHT? UH, THERE'S DIFFERENT STRATEGIES ABOUT HOW YOU MIGHT PUT, UH, THAT IN PLACE, WHETHER IT'S REQUIRING CITY COUNCIL APPROVAL ON CERTAIN THINGS, OR DO YOU PUT IN SOME TYPE OF GUARDRAILS SO YOU DON'T GO UP CERTAIN AMOUNTS.
THERE'S ALREADY THINGS THAT ARE IN PLACE THAT DO PROVIDE SOME OF THAT BECAUSE THEY HAVE A FIVE YEAR SMOOTHING.
SO WHEN THERE'S LOSSES, WE DO, WE DO SMOOTH THAT OVER FIVE YEARS, SO WE DON'T HAVE TO RECOGNIZE THAT LOSS ALL IN ONE YEAR.
SO THAT IS, IN A WAY, A GUARDRAIL ALREADY IN PLACE, OR THIS, UH, NOTION OF ADDING ADDITIONAL LAYERS DOES HELP SPREAD THAT OVER TIME.
SO THERE ARE SOME THINGS ALREADY BUILT IN LIKE THAT, BUT IF THE COUNCIL WANTS TO GO BEYOND THAT, UM, OR, UM, UH, ANOTHER IDEA THAT, UH, I'M AWARE THAT SOME OTHER, UH, ENTITIES USE IS FOR THE FUND TO HAVE THEIR ACTUARY AND DO THEIR ANALYSIS AND FOR THE CITY TO HAVE OUR ACTUARY TO DO OUR ANALYSIS, AND THEN WE COME TOGETHER.
AND IF THERE'S NO MORE THAN A 2% DIFFERENCE, THEN WE GO WITH THE FUND'S, UH, RECOMMENDATION.
IF THERE'S A GREATER DIFFERENCE, THEN WE HAVE A PERIOD OF TIME OF EITHER TRYING TO RECONCILE THAT OR IF WE CAN'T RECONCILE IT, SOME CITIES, I BELIEVE, UH, MAY HIRE A THIRD ACTUARY TO COME IN AND TRY TO WORK ON THAT.
OR DO YOU AVERAGE THE TWO OR HOW DO YOU APPROACH THAT? THERE'S WAYS TO DEAL WITH IT.
UH, BUT IF WE WANT TO RELY COMPLETELY ON THE ACTUARY AND THE RECOMMENDATIONS FROM THE BOARD, THAT'S PERFECTLY OKAY TOO.
I MEAN, IT'S JUST WHERE DOES THE COUNCIL WANT TO BE AND WHAT DO YOU WANT YOUR POLICY TO BE REGARDING THAT? UH, AGAIN, WE WILL CONTINUE TO HAVE THESE CONVERSATIONS.
I THINK THE, THE FUND AND THE, UH, STAFF AND THE BOARD WOULD SAY THAT THERE'S ALREADY THINGS IN PLACE, UH, SPECIFICALLY THE SIX APPOINTED BOARD MEMBERS.
BUT AGAIN, I KNOW THEIR FIDUCIARY RESPONSIBILITY IS NOT TO OUR GENERAL FUND AND IT SHOULDN'T BE.
UH, BUT, BUT Y'ALL DO HAVE THAT RESPONSIBILITY.
UH, SO I'LL MOVE ON TO NEXT STEPS ON SLIDE 25, NEXT STEPS OF WHERE WE ARE CONTINUING TO WORK WITH, AGAIN, THE GOOD PARTNERS THAT WE HAVE.
UH, WE, WE'VE HAD CONVERSATIONS WITH, UH, REPRESENTATIVES FROM BOTH ACTIVE AND RETIREE ASSOCIATIONS.
WE'LL CONTINUE TO HAVE THOSE DIALOGUES CONTINUE TO WORK WITH THE STAFF.
AND I KNOW MR. ATKINS PLANS TO CONTINUE TO MEET AND HAVE CONVERSATION WITH THE BOARD CHAIR.
UH, MAY 9TH, WE ARE SCHEDULED FOR ANOTHER AD HOC COMMITTEE MEETING.
WE WILL BRING YOU ANY UPDATES WE HAVE AT THAT TIME, MAY 15TH.
WE'RE ON THE SCHEDULE TO DO A, AS WE DO EVERY MID-MAY AN UPDATE TO THE FULL CITY COUNCIL ON OUR BUDGET OUTLOOK.
OUR PLAN IS TO GIVE THOROUGH ANALYSIS OF OUR FIVE YEAR PLAN AND BUILD IN SOME
[00:40:01]
OF THESE MODELS AND SOME OF THESE NUMBERS.SO YOU WILL UNDERSTAND THE IMPACT ON THE GENERAL FUND, UH, ON MAY 15TH.
I PUT IN JUST A DATE IN CASE YOU WANT TO CONSIDER IT.
IT'S NOT ONE OF THE DATES THAT WAS PREVIOUSLY IDENTIFIED, BUT DO YOU WANT TO HAVE ANOTHER AD HOC COMMITTEE MEETING BEFORE WE GET TO JUNE 5TH, WHICH WOULD BE, I THINK MY LAST OPPORTUNITY TO PROVIDE A BRIEFING TO THE FULL CITY COUNCIL AND THEN TAKE SOME TIME OF ACTION ON JUNE 12TH OR 26TH.
THAT IS, AS LONG AS WE'RE TRYING TO STAY ON A PATH OF GETTING, UH, APPROVAL BY THIS BODY AS WELL AS BY THE PENSION, UH, BOARD PRIOR TO YOUR JULY RECESS.
NOW THAT'S JUST THAT WE DON'T HAVE TO DO THAT.
OBVIOUSLY WE HAVE UNTIL NOVEMBER TO GET A PLAN APPROVED.
AND, UH, I KNOW THE BOARD'S GONNA APPROVE A PLAN BY NOVEMBER AND THEY'RE GONNA SUBMIT IT.
BUT WORKING TOGETHER, IF WE CAN COME UP WITH SOME AGREEMENTS, I WOULD HOPE THAT WE COULD GET SOME APPROVALS BEFORE JULY 1ST.
MY LAST STATEMENT JUST, UH, CITY'S FULLY COMMITTED.
WE ARE COMMITTED TO GETTING THIS FIXED AND GETTING IT RIGHT AND NOT KICKING ANY CANS DOWN THE ROAD.
IT IS IMPORTANT TO ME THAT, UH, WE FIND A WAY TO DO THIS FOR THE PROTECTION OF THE PENSION BENEFITS FOR ALL OF THE CITY EMPLOYEES AND THE RETIREES.
AND I AM COMMITTED TO DO THAT.
AND I KNOW THE STAFF, OTHER STAFF HERE AT THE CITY'S COMMITTED TO DO THAT AS WELL AS THE, THE FUND.
SO I WILL STOP AND TRY TO TAKE QUESTIONS AND I DO WANNA RECOGNIZE, UH, KELLY AND JOSH AND THEIR TEAM, THEY'RE HERE.
AND I I THANK YOU MR. ATKINS, BACK TO YOU.
UH, THANK YOU VERY MUCH, JACK.
AND ALSO I WANNA THANK NICK, UH, MERRI, UM, FOR HIS ATTITUDE, HOW TO FIX THIS.
UM, I GENERALLY GO TO THE PENSION BOARD.
UH, I WENT THIS MORNING AND I DO FEEL LIKE WE GOT SOME COMMON GROUND.
I FEEL LIKE WE DO HAVE A FOUNDATION THAT WE CAN BUILD ON THIS FOUNDATION.
AND I BELIEVE THAT WE CAN GET THIS DONE.
THE PURPOSE OF THIS EXERCISE WE DOING NOW, THAT IF WE HAVE TO SAID THAT WE HAVE A PLAN NOW THAT WILL GO TO AUSTIN AND SAID, HEY, WE CAN HAVE A FUN AND SOUND RECREATIONAL PLAN RIGHT NOW.
BUT THERE IS OTHER CAVEAT THAT I SEE THE RETIREES IN THE CURRENT UNIFORM THAT SAID, WHAT IS DIFFERENT FROM THE PLAN FROM THE STATE, UH, WE ARE TRYING TO ACCOMPLISH HERE TODAY.
I SEE THAT WHAT WE HEARING FROM OUR EMPLOYEES, OUR UNIFORM, IS THAT I HAVE NOT HAD A RAISE OR ANY EXTRA BENEFIT TO MY RETIREMENT CHECK SINCE 20 TO 2016.
AND WHAT WE ARE TRYING TO DO, COLLEAGUES THAT ARE POLICY MAKERS IS SAY, WE DO UNDERSTAND THAT.
I DO HEAR WHAT SENATOR RETIREES SAID, ARE YOU GONNA STAY HERE? ARE YOU GONNA LEAVE? UH, THE COST OF LIVING IS GOING UP.
YOU KNOW, SEVEN YEARS AGO I COULD GO TO STORE, COST ME A HUNDRED DOLLARS, NOW I GO TO STORE, IT COST ME $125.
I UNDERSTAND THE RETIREES AND A AND A AND ALSO THE CURRENT UNIFORM EMPLOYEES SAID THAT LET'S WORK TOGETHER.
AND WHAT I'M TRYING TO ACCOMPLISH HERE, JACK, IS NUMBER ONE, THAT THE QUESTION IS RIGHT NOW THAT EVERYONE ALWAYS ASKS WHAT CAN WE AFFORD? AND THAT IS A VERY DIFFICULT QUESTION.
WHAT CAN WE AFFORD WHEN WE DO HAVE 14 COUNCIL MEMBERS IN AMERICA WHO MAKE A DECISION ON WHAT WE CAN AFFORD, WE CANNOT AFFORD.
WE DO HAVE A CITY MANAGER WHO DO MAKE A RECOMMENDATION OF THE BUDGET, BUT IT'S OUR RESPONSIBILITY TO SAY, WHAT CAN WE ACTUALLY DO? AND THAT'S ONE, RELY ON YOU COLLEAGUES.
WE ARE THE POLICY MAKERS AND WE HAVE TO MAKE A DECISION WHAT WE CAN'T AFFORD, WHAT WE CAN DO, WHAT WE CAN CUT, WHAT WE CANNOT CUT.
AND JACK BY SAYING THAT, JACK, IF THAT, WHEN YOU LOOK AT THESE DIFFERENT OPTIONS, THE COLA DID NOT COME BACK THROUGH THE CITY COUNCIL.
IT DID NOT COME THROUGH, UH, OFTEN FROM THE BOARD.
IT'S SOMETHING THAT COW RUN BROUGHT IN.
THEY SAID THE CHI RUN SAID THERE, SURE, GET A COOLER, A COLA EARLIER THAN LATER.
IS THAT A FAIR STATEMENT? Y YES SIR.
WHAT HOUSE BILL 31 58 DID, UH, ADDRESS THE COLA, UH, BUT SETS IT TO BE, UH, NOT AVAILABLE UNTIL 70% FUNDED.
AND CHIRON'S RECOMMENDATION WAS TO, UH, TRY TO IDENTIFY A WAY TO DO THAT SOONER RATHER THAN, UH, 2046, RIGHT? SO BY SAYING THAT WHAT WE ARE TRYING TO, TO HAVE A COMMON GROUND, THAT IF WE
[00:45:01]
CAN DO A COLDER EARLIER, WHAT IT'S GONNA COST US A SUPPLEMENTAL PAY, WHAT IT GONNA COST US? AND RIGHT NOW, THAT'S WHAT WE ARE TRYING TO DIGEST.NOW WHAT CAN WE DO GOING FORWARD? AND COLLEAGUES, UH, I I'VE WORKED WITH THE CHAIRMAN NICK MARRIED OVER THERE.
UH, UH, THANK PAULA BLACKBURN AND THANK, UH, COUNCIL WILLIS, YOU KNOW, FOR ALL THE HARD QUESTIONS THAT THEY HAVE BEEN ASKING OVER AND OVER, AND ALSO MS. MILLONS THE QUESTION THEY'VE BEEN ASKED OVER.
BUT WE DO HAVE FIDUCIARY, A FIDUCIARY RESPONSIBILITY THAT WHAT WE CAN DO, AND THAT'S WHAT WE'RE TRYING TO DO.
WE'RE TRYING TO ACCOMPLISH THIS TO MEET EVERYBODY HALFWAY.
NO ONE GONNA HAVE A HUNDRED PERCENT THEIR AIRWAY A HUNDRED PERCENT OUR WAY, BUT WE GOTTA COME TO THIS CONCLUSION THAT WE ARE DOING THE BEST WE CAN TO MAKE SURE WE ARE MAKING THE RIGHT DECISION.
AND WITH THAT, I'M GONNA TURN ON TO MS. WILLIS', GO RIGHT THEN I'M GO HER, THEN I'M GO TO Z DON'T GO BACK AND FORTH, BUT WHAT WE'LL TRY TO DO IS TRY TO LIMIT AT LEAST FIVE MINUTES FOR THE FIRST ROUND.
EVERYBODY GOT FIVE MINUTES, THEN THAT WAY AFTER FIVE MINUTES WE CAN COME BACK AND DO ANOTHER ROUND OR WHATEVER.
SO, SO JACK, WILL YOU MAKE SURE THAT YOU CUT YOUR ANSWER SHORT AND, AND ALSO COLLEAGUE HAVE A DIRECT QUESTION, THEN YOU GET MORE QUESTION IN.
IF YOU DO DIRECT AND GET BACK, YOU CAN USE YOUR WHOLE FIVE MINUTES.
I DON'T THINK JACK IS USUALLY WHERE THE, UH, GOING ON AND ON OCCURS, BUT, UM, OKAY.
UM, SO A QUESTION AROUND THE FIVE YEAR RAMP UP AND ALSO ABOUT THE OUTSIDE ADVICE.
UM, WE KNOW THE FUND HAD TO HIRE AN ACTUARY, AND SO ALL OF THIS RELATES BACK TO CHIRON'S RECOMMENDATION.
AND SO I'M WONDERING WHERE IS OUR OUTSIDE PROFESSIONAL CONSULTATION COMING FROM? I MEAN, THAT WE ALREADY HAVE ON CONTRACT OR OUTSIDE OF CONTRACT ON THIS.
WE, WE HAVE A CONTRACT WITH DELOITTE WHO SERVES AS THE CITY'S ACTUARY, AND THEY'VE BEEN MEETING WE WITH ME AND PROVIDING ME ADDITIONAL RECOMMENDATIONS AND REVIEWING THE DATA AND UH, CHECKING KIND OF THE NUMBERS AS WELL.
UH, WE DID WORK WITH A GROUP EARLIER, AS YOU'LL KNOW, UH, THE MAYOR'S TASK FORCE OR STUDY GROUP THAT HE HAD POINTED TO, TO LOOK AT THE PENSION THAT INCLUDED ROB.
SO, UM, SO I GUESS WHAT I'M GETTING AT AS ON THIS, ON PAGE NINE, WE TALKED ABOUT WHAT CHIRON HAD MODELED.
DID DELOITTE INDEPENDENTLY MODEL SOMETHING FOR US? NO, THEY DIDN'T D THEY DIDN'T COME IN AND PROPOSE ADDIT ADDITIONAL SCENARIOS.
ALL FIVE OF THESE, UH, STRUCTURES ARE BASED UPON CHIRON'S RECOMMENDATION.
UM, AND AGAIN, ALL OF THEM ARE REASONABLE.
UM, IT'S, THEY'VE IDENTIFIED MOST PREFERRED TO LEAST PREFERRED.
UM, WELL, RIGHT, I SEE THAT ON THE SLIDE.
SO MY QUESTION IS, UM, WOULD IT BE PRUDENT TO SEE, I MEAN, DID, UH, I MEAN CHIRON WORKS FOR THE FUND AND SO DO, I MEAN, WAS THERE A SIX YEAR, A SEVEN YEAR, AN EIGHT YEAR? I MEAN, I'M, I'M JUST CURIOUS AS TO HOW FAR OUT THIS WENT AND WHAT THOSE NUMBERS WOULD'VE LOOKED LIKE, JUST SO WE CAN, SO SOME OF THEM, THANK YOU.
UM, I, I WOULD NOT SUGGEST THAT WE GO BEYOND THE FIVE YEARS.
I, I THINK WE CAN, UH, DEFINITELY MANAGE WITHIN THE FIVE YEAR STEP UP, UH, AND GOING OUT FURTHER JUST, UM, DELAYS CASH GOING INTO THE FUND.
UM, BUT WE DID NOT ASK THEM TO DO A, A FOUR YEAR OR A TWO YEAR.
THEY JUST PICK, YOU KNOW, A THREE AND A FIVE.
UH, BUT A TWO YEAR RAMP UP OR A FOUR YEAR RAMP UP, UH, MIGHT GIVE US SOMETHING DIFFERENT TO LOOK AT IF, OKAY, AND SO REMIND ME, AND I THINK YOU WERE TOUCHING ON IT, BUT ABOUT THE STEP DOWN, YOU KNOW, SO THAT WHEN WE'RE IN 2050, ALL OF A SUDDEN WE'RE, YOU KNOW, WE'VE GOT, YOU KNOW, A MUCH LOWER NUMBER OR I GUESS THE VARIANCE DECLINES.
SO IN, IN, IN 2055, UM, THE, THE UNFUNDED ACTUARIAL LIABILITY THAT WE'RE STARTING WITH, WE'LL BE FULLY PAID OFF 'CAUSE WE'RE AMORTIZING IT OVER 30 YEARS.
SO EVEN IF WE WENT TO A TRADITIONAL A DC IN 2055, YOU WE'RE GONNA SEE A SIGNIFICANT DECREASE IN OUR CONTRIBUTION.
'CAUSE WE WILL JUST BE FUNDING THE NORMAL COST AND ANY ADDITIONAL LAYERS THAT WE'VE ADDED IN, UM, THE STEP DOWN, UH, WAS AN APPROACH THAT CHIRON, UM, CONSIDERED, UH, BECAUSE THEY THOUGHT THAT FROM A CITY PERSPECTIVE, WE MIGHT WANT TO SEE THAT SO THAT WE DON'T HAVE IN ONE YEAR A $400 MILLION DECREASE IN OUR CONTRIBUTION.
BUT PHASING THAT DOWN OVER TIME, NOT SURE THAT'S A REAL BENEFIT TO US.
[00:50:01]
WANTED TO UNDERSTAND IS WHERE WE SEE THAT AS A BENEFIT.I MEAN, I DON'T KNOW, IT'S SO FAR OFF THAT'S, YOU KNOW, THE FUTURE UNBORN AND FUTURE COUNCILS WAY BEYOND US.
AND SO, UM, I MAY WANNA JUST DIG INTO THAT WITH YOU AND UNDERSTAND IT BETTER ON PAGE 23 WHEN YOU GET INTO ADDITIONAL OVERSIGHT, I ABSOLUTELY THINK THIS IS NECESSARY.
UM, WE MUST DO THIS, AND I I DON'T REALLY LIKE TO SEE IT REPRESENTED IN THAT FIRST BULLET.
CITY'S CURRENT OVERSIGHT IS SIX OF 11 BO BOARD MEMBERS BECAUSE IT'S REALLY A FALSE PREMISE BECAUSE THEY'RE ABSOLUTELY OBLIGATED TO FIDUCIARY DUTY TO THE FUND.
AND I MEAN, IN GOING TO THE MEETING THIS MORNING AND PREVIOUSLY, I MEAN, THAT IS EXACTLY WHAT'S HAPPENING AND THAT'S WHAT EVERYONE'S OBLIGATION IS, BUT THE TAXPAYER IS REALLY NOT REPRESENTED THERE.
AND SO, UM, I, YOU KNOW, THE, THE, THE MIX WAS CHANGED, UM, BY HB 31 58 BECAUSE OF A FAILED MODEL THAT GOT US INTO THIS.
AND SO, UM, THERE'S JUST LITTLE AIRING OF THE CITY'S BUDGETARY PERSPECTIVE.
SO I WOULD JUST EVEN STRIKE THAT LANGUAGE GOING FORWARD BECAUSE IT'S JUST NOT ACCURATE.
AND SO I'M GLAD YOU'VE OUTLINED SOME DIFFERENT OPTIONS AND I, I DEFINITELY THINK THAT WE HAVE TO EXPLORE THOSE.
UM, AND YOU MENTIONED ALSO SOMETHING, OR IT WAS DISCUSSED AROUND URGENCY.
UH, I MEAN WE ALL KNOW WE'VE GOT THIS NOVEMBER DATE, UM, I WANNA MOVE AT THE RIGHT PACE AND OBVIOUSLY THE TIMEFRAME IS CLOSING, BUT I DON'T THINK THIS SHOULD BE TIED TO AN EXECUTIVE'S DEPARTURE OR ANYTHING ELSE LIKE THAT.
I THINK THAT, UM, YOU KNOW, AS WE WORK THROUGH THIS, IT NEEDS TO BE AT THE PACE THAT'S RIGHT FOR WHAT WE NEED TO ACCOMPLISH.
FIVE MINUTES AND IF I CAN JUST FINE, MAY I RESPOND TO THE LAST PART PART OF THAT? YES, YOU RESPONDED.
UM, THE, THE GOAL TO ACHIEVE, UH, SOME CONSENSUS AND APPROVAL, UH, IN JUNE WAS REALLY PUSHED BY ME ACTUALLY BECAUSE, UH, IT GIVES ME THE DECISIONS BEFORE YOUR JULY RECESS SO THAT WE CAN MAKE SURE THAT WE'RE BUILDING IT INTO THE BUDGET TO PRESENT TO YOU ON AUGUST THE 13TH.
AND SO, UM, THE END OF JUNE WAS KIND OF MY SELF-IMPOSED DEADLINE, UH, NOT, BUT THE STATE'S DEADLINE IS NOVEMBER.
THANK YOU CHAIRMAN MARINA, I DON'T THINK HE'S ON THE COMMITTEE.
I THINK JACK, FOR THAT PRESENTATION, UM, WHEN I'M LOOKING AT, UH, THE TRADITIONAL THREE YEAR INTO FIVE YEAR, UH, STEP UP AND LOOKING AT WHAT I'M CALLING, UH, YOU KNOW, EITHER A SAVINGS OR FORFEITING OF, OF THOSE DOLLARS, UH, UNDER FIVE YEARS ON THE TRADITION TRADITIONAL PLAN, WE'RE LOOKING AT APPROXIMATELY NINE 90 MILLION AND WE'RE DOING IT THE, UH, THE THREE YEAR STEP UP 89 MILLION, AND THEN THE FIVE YEAR OVER FIVE YEARS, UH, 94 MILLION.
AND SO IF WE WERE TO GO THE TRADITIONAL ROUTE, WE'RE LOOKING AT A POTENTIAL SAVINGS OF ABOUT, UH, $4 MILLION OVER A FIVE YEAR PERIOD.
UM, IS THAT, IS THAT CORRECT? SO IT'S, IT'S CUMULATIVE IN THAT IT YEAR THEY WOULD BE, THERE WOULD BE A DIFFERENCE.
AND SO YES, I, IF YOU WERE LOOKING FIVE YEARS OUT ON THAT FIFTH YEAR OUT, WE WOULD BE PAYING $90 MILLION MORE, BUT EACH OF THOSE YEARS IN BETWEEN, WE WOULD BE PAYING INCREASED AMOUNTS AS WELL.
UM, SO ON THE STEP UP OR STEP DOWN SCENARIOS, UM, IT, IT, IT SPREADS THE, UM, THE, THE STEPPING UP TO IT, UH, SO THAT WE DON'T DO IT AS QUICKLY.
WE DO GET TO THE SAME PLACE AT THE END, BUT IT'S JUST A DIFFERENT WAY TO GET THERE.
AND I, I DON'T THINK I'M ANSWERING YOUR QUESTION EXACTLY AND SO I MIGHT HAVE TO WORK WITH YOU A LITTLE MORE ON IT AND I APPRECIATE IT.
UM, WE HAVE A BIENNIAL BUDGET FORECAST FOR 24 25.
UM, I WOULD LIKE TO SEE A PERCENTAGE OF WHAT THE FIRST YEARS ARE FOR TRADITIONAL THREE YEAR STEP UP AND FIVE YEAR STEP UPS THAT WE'RE SEEING WHAT PERCENTAGE OF THE BUDGET OF THE 20, UH, 24 25 FORECAST THAT WOULD BRING US IN AT.
DOES THAT MAKE SENSE? HOW MUCH OF THE, OF OUR BUDGET WOULD BE IMPACTED ON YEAR ONE THAT WE MIGHT HAVE TO FORFEIT IN SOME OTHER WAY TO FUND THIS? WELL, NO, I'M, I'M JUST TRYING TO GET CLARITY ON IF WE WERE TO GO WITH THE TRADITIONAL ON THE ONE YEAR UHHUH, SAME THING FOR THREE YEAR STEP UP AND FIVE YEAR STEP UP, HOW MUCH OF OUR BUDGET PERCENTAGE WISE WOULD BE, UH, BE ALLOCATED TOWARDS THAT O OKAY.
AND THEN, UH, WE'VE HISTORICALLY HAVE BEEN CUTTING OUR PROPERTY TAX RATE.
UM, JUST SEEING IF YOU HAVE ANY THOUGHT ON THAT, IF WE CONTINUE THAT TRAJECTORY WHERE WE WERE TO KEEP IT FLAT, WHAT, UH, WOULD WE BE GETTING IF WE STOPPED
[00:55:01]
CUTTING THE RATE AT ONE POINT? WOULD WE GET, WOULD WE GET TO THESE NUMBERS AT A SOONER PACE? WOULD WE HAVE MORE DOLLARS IN THE GENERAL BUDGET? YEAH, NO, UNDERSTOOD.SO, UM, REGARDING THAT QUESTION, UM, THE LAST THREE YEARS WE'VE HAD AN OPPORTUNITY IN THE WAY THAT THE, UM, ROLLBACK RATES AND THE TAX RATES ARE CALCULATED WITH THE COUNTY THAT WE WERE NOT HAVING TO COMPLETELY, UH, LIVE AT A 3.5% REAPPRAISE GROWTH.
SO STATE LAW SAYS THAT WE CAN GROW BY 3.5% ON OUR PROPERTY TAX REVENUE FROM REAPPRAISAL, AND THEN WE GET NEW CONSTRUCTION.
THERE WERE SOME ADDITIONAL CONDITIONS IN THERE THAT WE, UH, WERE ABLE TO TAKE ADVANTAGE OF COMING OUT OF THE PANDEMIC.
IN 25, WE ARE GOING TO BE LIMITED TO 3.5% GROWTH IN REAPPRAISAL PLUS NEW CONSTRUCTION.
AND I BELIEVE THAT BECAUSE WE WILL CONTINUE TO HAVE GROWTH ABOVE THAT LEVEL, THAT WE WILL HAVE TO BY STATE LAW REDUCE OUR TAX RATE REGARDLESS OF ANY OF THIS.
SO WE'RE, THAT'S ONE OF MY CONCERNS THAT WE ARE LIMITED GOING FORWARD, UH, ON OUR REVENUE SIDE.
THAT'S ANOTHER REASON THAT I WANNA BE, BE CAUTIOUS ABOUT HOW WE APPROACH OUR EXPENSE SIDE.
UM, AND WE HAVE TO MANAGE THAT WITHIN THE RESOURCES WE HAVE, YOU KNOW, WE HAVE CUT THE, THE TAX RATE SIGNIFICANTLY.
WELL, I'M NOT GONNA SAY SIGNIFICANTLY.
WE, WE HAVE CUT THE TAX RATE OVER THE LAST SEVERAL YEARS WHERE IF WE HAD NOT CUT THE TAX RATE, OUR REVENUE WOULD BE, I, I THINK THE NUMBERS BETWEEN 90 AND A HUNDRED MILLION DOLLARS MORE THAN IT IS RIGHT NOW.
BUT WE'VE DONE THAT BECAUSE IT'S BEEN A PRIORITY OF THE CITY COUNCIL TO, TO MAKE THOSE REDUCTIONS.
AND IN THE GOOD TIMES, THAT WAS THE RIGHT THING TO DO, BUT WE'RE AT A POINT WHERE WE'RE NOT GONNA BE ABLE TO LIVE OFF OF THAT GROWTH BECAUSE WE'RE GONNA BE RESTRICTED, LIMITED, UM, AND WE'VE GOT THIS ADDITIONAL EXPENSE COMING AND IT'S MY JOB TO TRY TO HELP AND RECOMMEND TO YOU WAYS TO DO THAT.
IT'S YOUR JOB TO MAKE THAT FINAL DECISION.
AND, AND I'LL JUST END WITH THAT, YOU KNOW, UM, I DO THINK WE ARE ON, IN A GOOD PLACE RIGHT NOW IN DALLAS.
YOU KNOW, WE JUST GOT OFF, UM, AN INCREASE OF, UM, ABOUT 8.1%, UM, FROM A YEAR OR FROM TWO YEARS AGO TO THIS PAST YEAR'S BUDGET.
UM, AND JUST WANNA MAKE SURE THAT IF WE'RE ABLE TO DO SOMETHING TODAY, THAT WE ACT ON IT TODAY AND NOT WAIT ON SOMETHING THAT IT'S HARDER TO SEE INTO THE FUTURE.
THANK YOU COUNCILMAN BLACKMAN.
UM, SO I DO HAVE A QUESTION KIND OF GOING ON.
THE NEW REVENUE, YOU SAID IT'S $20 MILLION A YEAR, NOT CAPPED.
DOES THAT MEAN THAT IT WON'T FALL UNDER THE 3.5 CAP? SO THE NEW CONSTRUCTION, AND THAT'S JUST AN APPROXIMATION THAT WE'VE BEEN GETTING ABOUT $20 MILLION I THINK FROM OUR NEW CONSTRUCTION.
UM, 3.5% GROWTH ON REAPPRAISAL, NO CAP ON NEW CONSTRUCTION, BUT IT DOES KICK IN IN 2025 OR DOES NOT, IT DOES THE, THE CAP, THE CAPITAL.
SO WE HAVE FREE, WE HAVE FREE APPRAISALS, I GUESS I WANNA CALL IT UNTIL 2025.
WELL, WITH THE CERTIFIED VALUES THAT WE GET THIS JULY OKAY.
THAT WE SET OUR TAX RATE ON IN AUGUST WILL BE LIMITED.
SO THE NEXT TAX RATE YOU SET WILL BE LIMITED.
SO WITH THAT BEING SAID, WE NEED TO LOOK FOR NEW REVENUE SOURCES AND YOU'VE BROUGHT FORTH THE SCENARIOS AND IT GETS US ALL, LIKE YOU SAID, TO THE SAME END THE DESTINATION, BUT THE JOURNEYS A LITTLE DIFFERENT.
SO MY QUESTION IS, IS WHAT ARE THE FUNDING SOURCES? MAYBE HAVE THOSE BEEN IDENTIFIED? BECAUSE I'VE, I'VE GOT SOME IDEAS AND I DON'T KNOW IF YOU'RE READY TO HAVE THOSE TO EXPLORE THEM.
SO RIGHT NOW, THE, THE ASSUMPTION, AND AGAIN, WHY I'M LEANING TOWARDS THE FIVE YEAR STEP UP IS BECAUSE I THINK WE CAN DO THAT WITHIN OUR EXISTING REVENUES.
I WANT MORE DIFFERENT REVENUES, RIGHT? I WOULD LOVE DIFFERENT REVENUE STRUCTURES AND I KNOW THAT DR. PEREZ IS, UH, RESEARCHING A FEW WITH THE CITY ATTORNEY'S OFFICE ON THE LEGALITY OF SOME THINGS.
UM, BUT IF WE CAN IDENTIFY SOME THINGS FOR TRANSPORTATION, THEN THAT FREES UP OTHER TRANSPORTATION MONEY IN THE GENERAL FUND THAT WE CAN SHIFT OVER HERE.
SO JUST TRYING TO FIGURE THOSE PIECES OUT.
UM, YOU KNOW, I'VE, I'VE HEARD CONVERSATION ABOUT, UM, DEDICATED SALES TAX, BUT RIGHT NOW WE'RE AT THE CAP ON OUR SALES TAX.
UM, JACK, I THINK YOU CAN ASK THE LEGISLATURE, I DUNNO IF THEY'D BE WILLING TO DO IT.
SO THAT'S THE, THAT'S THE POLITICAL WILL DISCUSSION TO HAVE, BECAUSE I ALSO THINK THAT THERE MAY BE POLITICAL WILL TO LOOK AT A PENNY THAT WE GIVE DART, START SHAVING
[01:00:01]
SOME OF THAT OFF.UH, BECAUSE I DO FEEL THAT THEY'VE BUILT OUT, DO THEY STILL NEED A PENNY TO DO THOSE PROJECTS? UM, I'M NOT SAYING DEFUND THE, YOU KNOW, DART, BUT IT DO, THEY NEED THE FULL PENNY.
AND I DO THINK THERE'S WILL AMONGST THE MEMBER CITIES TO TAKE A LOOK AT THAT BECAUSE EVERYBODY'S GOT NEEDS SUCH AS OURS OR EVEN OTHER ONES.
UH, ANOTHER THING IS WE CAN INCREASE OUR TAX, BUT WE'D HAVE TO ASK THE VOTERS.
SO I GUESS THAT MY THING IS, WHAT I WOULD LIKE TO SEE IS, I DON'T MIND THE RAMP UPS, BUT I DO BELIEVE THAT WE SHOULD DO A ONE-TIME CASH SMALL INFUSION.
I DON'T KNOW IF IT'S A GOOD FAITH EFFORT OR WHATNOT, BUT BY DOING SOMETHING THAT SAYS, HEY, WE ARE LOOKING AT HOW WE DO BUSINESS AS A CITY AND WE'RE WILLING TO PUT IT INTO THE FUND BECAUSE IT MATTERS.
WE MADE THIS PROMISE AND WE'VE TALKED ABOUT THE MORE YOU PUT IN, I'M NOT SAYING A FULL BILLION RIGHT AT THE BEGINNING, BUT WHATEVER THAT IS, BECAUSE THEN IT BRINGS DOWN YOUR PAYMENTS.
SO, UM, IT'S, THAT'S WHAT I'M LOOKING AT IS HOW DO WE INFUSE SOMETHING THAT MAYBE STABILIZES IT A LITTLE MORE, THAT WE'RE ALMOST TO 40.
UM, AND JUST SHOWS A GOOD FAITH EFFORT BECAUSE I DO THINK THE COLA, AS YOU TALKED ABOUT, IS A COMPOUNDING, UH, EXPENSE.
AND SO I DO BELIEVE THAT IF THE FUND, UM, IF THE FUND PERFORMS WELL, THEN EVERYBODY SHOULD SHARE IN THE, THE GROWTH, RIGHT? THE, THE NEW, THE, THE NEW REVENUES.
BUT IF IT DOESN'T, THEN WE ALL HUNKER DOWN BECAUSE IT'S JUST HOW WE DO OUR OWN LIFE.
AND SO, UM, AND HERBICIDE IS VERY IMPORTANT BECAUSE, UM, LOOKING AT THESE NUMBERS, I CAN'T IMAGINE IN 2050 WHAT THIS COUNCIL'S GONNA HAVE TO DEAL WITH.
AND, UH, THAT SCARES ME BECAUSE THOSE ARE HUGE NUMBERS.
AND SO, UM, WE HAVE TO REALLY SET UP, I THINK, A TRAJECTORY WITH A FUNDING STREAM THAT DOESN'T ONLY COME FROM OUR GENERAL FUND.
PUT IT, PUT IT ON THE, THROW EVERYTHING TO THE, TO THE WALL AND LET THE POLITICAL WILL DEAL WITH IT.
UM, THOSE ARE, I MEAN, THOSE AREN'T QUESTIONS, BUT THOSE ARE MY COMMENTS BECAUSE I DO THINK THAT, UM, WE DO NEED TO REALLY LOOK AT, UM, NOT ONLY HOW WE CHANGE IT WHERE WE WORK AT THE CITY AS FAR AS DOING BUSINESS, BUT WE ALSO HAVE TO, UH, REALIZE THAT SOME OF THESE THINGS ARE JUST NOT AFFORDED, UM, TO, TO RIGHT NOW.
AND AS WE GET MORE STABLE AND LEGS NO MORE, YOU KNOW, THE SEA LEGS GO AWAY, THEN WE CAN ALL START, UM, BEING, YOU KNOW, KIND OF LETTING OFF THE REINS.
BUT I DO THINK OVERSIGHT IS KEY TO ALL OF THIS.
SO I JUST WANNA SAY THIS MORNING, UM, AT THE PENSION BOARD MEETING, THAT WAS A GREAT PRESENTATION.
I THINK IF YOU DON'T KNOW A LOT ABOUT THIS PENSION, YOU SHOULD GO WATCH IT.
AND I WOULD HIGHLY RECOMMEND WE INVITE KELLY TO COME AND DO THAT EXACT SAME PRESENTATION BECAUSE IT HELPS US UNDERSTAND WHY ARE THEY SUGGESTING SOMETHING RADICALLY DIFFERENT THAN, THAN YOU ARE.
AND I, I WOULD JUST REALLY RECOMMEND WE DO THAT.
PLUS THERE WERE SOME SLIDES THAT REALLY ILLUSTRATED SOME THINGS THAT I'M NOT SURE WE HAD THE FULLNESS IN THIS PRESENTATION.
AND SO I'M GONNA CALL OUT HER SLIDE NUMBER 12.
AND WHAT I REALLY WANT YOU TO SEE IS THIS BLUE BAR, AND THIS IS THE EFFECT OF DOING THE FIVE YEAR RAMP UP.
AND WHAT IT MEANS IS THAT EVERY YEAR WE HAVE TO KEEP GETTING BIGGER AND BIGGER.
BUT IF WE DID THE TRADITIONAL, FIRST OF ALL, THAT IS THE, THE LINE.
BUT EVEN THE THREE YEAR RAMP UP IS SO MUCH CLOSER TO A BASELINE WHERE IT'S SO MUCH MORE PREDICTABLE THAT I UNDERSTAND NOW WHERE I DIDN'T BEFORE, WHY THEY'RE RECOMMENDING THAT.
AND WHILE IT MIGHT BE LOVELY THOSE FIRST THREE OR FIVE YEARS FOR THE RAMP UP, I GOTTA TELL YOU, I WON'T BE ON COUNCIL THEN, BUT I DON'T WANT ANY OF THEM TO CALL ME SAYING, HOW COULD YOU HAVE LEFT US WITH THIS? SO THIS FIVE YEAR, UM, RAMP UP, STEP UP, THIS IS VERY PROBLEMATIC TO ME HAVING LEARNED MORE.
SO I LOVE THE COMMENTS YOU MADE, SHARE ABOUT WORKING TOGETHER.
I NEED TO ASK THIS QUESTION THOUGH.
AT THE END OF THE DAY, IF THEY ADOPT A PLAN THAT'S DIFFERENT THAN WHAT WE ADOPT, WHOSE PLAN PREVAILS, THE POINT IS THAT I BELIEVE THAT WE SHOULD BE ON THE SAME PAGE.
AND THAT'S WHAT WE'RE TRYING TO DO.
WHEN I WENT TO AUSTIN, TEXAS, THEY SAID WE NEED TO BE ON THE SAME PAGE.
AND THAT'S WHAT WE STARTED A GOOD FOUNDATION THIS MORNING TO MAKE SURE WE START OUT ON THE SAME PAGE.
NOW WE, WE GOT A FOUNDATION, BUT WE ARE TRYING TO BUILD ON THE FOUNDATION.
[01:05:01]
WHAT THEY PRESENTED THIS MORNING AND WHAT WE'RE LOOKING AT NOW, THESE ARE VERY FAR APART.AND IN FACT THEY'RE COMPLETELY ON OPPOSITE ENDS WHEN YOU START TALKING ABOUT OPTIONS FOR, UM, ALMOST ALL OF THESE THINGS, RIGHT? SO THEY RECOMMENDED THE ONE THAT WAS MOST RECOMMENDED BY CHIRON.
YOU'RE RECOMMENDING THE ONE THAT WAS LEAST RECOMMENDED BY CHIRON.
I MEAN, THEY'RE LITERALLY POLAR OPPOSITES.
SO THERE WERE A COUPLE ITEMS YOU ASKED ABOUT.
FIRST WAS ABOUT THE ACTUALLY DETERMINED CONTRIBUTION.
IT SOUNDS LIKE WE ALL ARE AGREEING, OF COURSE WE'RE GONNA GO THERE.
I'M GONNA SAY HAVING LEARNED IT, THE TRADITIONAL ONE IS THE ONE I WOULD WANNA GO WITH.
AND IT'S A BIG NUMBER IN THAT FIRST YEAR.
AND WHAT IT MEANS IS THAT YOU'RE NOT GONNA BE ABLE TO DO BUDGETING THE WAY YOU'VE DONE IT BEFORE.
YOU'RE NOT GONNA BE ABLE TO INCREMENT THE BUDGET.
YOU'RE GONNA HAVE TO START OVER AND RADICALLY LOOK AT OUR BUDGET IN A DIFFERENT WAY SO THAT WE COULD COME UP WITH THAT $66 MILLION, BUT WE CAN DO IT.
'CAUSE WE HAVE A GIANT BUDGET, A GIANT BUDGET THAT HAS INCREASED A BILLION DOLLARS OVER FIVE YEARS.
I'M NOT SAYING THAT THERE WOULDN'T BE THINGS THAT WOULD CUT BACK, BUT JUST THE PRESENTATION ON HISTORIC PRESERVATION YESTERDAY WHERE THEY WERE PROPOSING THREE ADDITIONAL STAFF MEMBERS.
WE HAVE TO HAVE OUR LEADERSHIP AND I MEAN STAFF LEADERSHIP SAYING, NO, YOU DON'T UNDERSTAND, YOU'RE PROBABLY GONNA NEED TO CUT BACK STAFF.
LIKE THAT WAS SO, SO PROBLEMATIC THAT THEY WOULD THINK THAT'S EVEN POSSIBLE.
THEY'RE NOT UNDERSTANDING THE BIGGER PICTURE.
AND I DON'T KNOW IF THAT'S YOUR ROLE AS CFO, I UNDERSTAND WE HAVE A CITY MANAGER ISSUE, BUT THERE NEEDS TO BE AN UNDERSTANDING AT CITY HALL.
WE NEED A RADICALLY DIFFERENT BUDGET.
THE SECOND THING IS ABOUT, UM, REDUCING THE EMPLOYEE CONTRIBUTION.
WE'RE SORT OF GLOSSING OVER THAT.
AND IT WAS A VERY BIG RECOMMENDATION THAT KYRON SAID, I UNDERSTAND WHY, BECAUSE BOY, HOW ARE WE EVEN GONNA PAY FOR THE ADEC AND THE COLA? BUT LET'S NOT GLOSS OVER THE FACT THAT THE EMPLOYEES, AGAIN, ARE GONNA BE GIVING UP SOMETHING.
AND THIS GROUP, WE'VE ALREADY ASKED THEM TO GIVE UP SOMETHING.
WE DIDN'T ASK ERF TO GIVE UP A SINGLE THING.
BUT THEY'VE INCREASED THEIR CONTRIBUTION, THEY SUSPENDED THEIR COLA.
SO IN LIEU OF OF REDUCING THAT CONTRIBUTION, WE REALLY HAVE TO CONSIDER THIS COLA IN A MUCH FULLER WAY.
AND THE NUMBER ONE THING THAT I WOULD LIKE TO HEAR COLLEAGUES SAY IS WE NEED PARODY.
WE CAN'T HAVE ONE CLASS OF EMPLOYEES GETTING A COLA THAT THE OTHER CLASS ISN'T GETTING.
AND COLAS ARE SUPER EXPENSIVE.
AND YOU CAN SEE IT IN THE NUMBERS HERE, BUT WE'RE GONNA HAVE TO SAY, YOU KNOW WHAT, ERF, YOU CAN'T BE GETTING THAT KIND OF COLA WHEN WE'RE NOT GIVING A DIME HERE.
AND A ONCE TIME COLA FOR, FOR WHAT? TILL 2043.
SO THAT'S NOT, THAT'S NOT OKAY FOR ME.
UM, THE NORMAL COST ISSUE, AM I CORRECT THAT IT'S GONNA END UP BEING 6.5% UNDER, UNDER THE SCENARIO YOU GAVE AS OPPOSED TO THE 34 POINT A HALF THAT WE'RE DOING? LIKE WE'RE DOING THE TOTAL CONTRIBUTION AT 34 POINT A HALF, BUT IT'S NOT REALLY HITTING THE, THE UNFUNDED, RIGHT? YEAH, YOU'RE CORRECT.
SO, SO THAT PART, YOU KNOW, WHEN WHEN YOU START TALKING ABOUT GUARDRAILS, YOU'RE REALLY ONLY TALKING ABOUT A VERY SMALL PERCENT.
IT DOESN'T SEEM LIKE THERE'S A DELTA THAT'S SO BIG THAT WE COULDN'T ACCOMMODATE IT IN OUR BUDGET.
WOULD YOU AGREE? I I DO AGREE THAT IT IS A SMALLER NUMBER AND I DON'T THINK THAT ANY GUARDRAIL AT 5% WOULD POTENTIALLY EVER BE HIT.
THAT'S MY, SO THE ONE THING THAT WASN'T SAID AT THE PENSION MEETING OR HERE IS THE THING THAT'S MOST IMPORTANT TO ME, AND I'M GONNA SAY THIS AS CHAIR OF PUBLIC SAFETY, BUT JUST AS A RESIDENT, IS WE AREN'T TALKING ABOUT RECRUITING AND RETENTION AND EVERYTHING WE NEED TO DO ON THIS PLAN HAS TO BE FORMED AROUND THAT PRINCIPLE OF HOW ARE WE GONNA KEEP OUR OFFICERS, HOW ARE WE GONNA ATTRACT NEW ONES? 'CAUSE WE ARE VERY CLOSE TO HAVING A PUBLIC SAFETY SITUATION.
I DON'T WANNA SAY THE WORD CRISIS.
THANK, THANK, BUT WE'RE REALLY CLOSE.
UM, OKAY, JACKIE, I'M GONNA LET YOU FINISH MAKING YOUR NOTES.
ARE YOU, ARE YOU SURE? OKAY,
UM, SO I WAS NOT AT THE MEETING THIS MORNING AND JUST WANTED CLARIFICATION.
UM, IF I LOOK AT SLIDE 10 AND WE LOOK AT THE AMOUNT, THE COLUMNS WHERE IT LISTS ALL OF THE CONTRIBUTIONS OVER THE NEXT 30 YEARS, DO WE CON WE DON'T CONTRIBUTE OR HOW SHOULD I SAY? I'M ASSUMING THAT THOSE ARE NOT THE SAME AMOUNT UNDER THE TRADITIONAL VERSUS THE THREE YEAR VERSUS THE STEP UP, RIGHT? WE, AT THE END OF THOSE 30 YEARS, WILL WE HAVE PAID MORE IN SOME OF THESE SCENARIOS AND LESS
[01:10:01]
THAN OTHERS? IN I BELIEVE IN ALL FIVE OF THE SCENARIOS, WE WILL PAY ABOUT $4.1 BILLION NET PRESENT VALUE.SO USING THE NET PRESENT VALUE OVER TIME, IT'S, WE GET TO THE SAME PLACE.
BUT YES, THERE IS SOME DIFFERENCES, UM, FROM 10.8 BILLION TO 11 BILLION.
SO THERE'S A LITTLE BIT DIFFERENCE IN HOW YOU GET THERE, BUT YOU DO GET TO THE SAME PLACE ON A NET PRESENT VALUE BASIS.
AND SO IS THERE ONE THAT'S SIGNIFICANTLY LESS EXPENSIVE? LIKE IF WE ARE GO SHOPPING, IS THERE, IS THERE A BARGAIN?
IT, IT'S, IT'S, I WAS LOOKING FOR SOMETHING.
WE GET TO THE SAME PLACES, JUST HOW DO YOU WANNA GET THERE? OKAY.
I'VE GOT A FEW OTHER QUESTIONS.
UM, SO IF WE WERE TO SELL AN ASSET AND MAKE A CONTRIBUTION, LET'S JUST SAY IT'S A MILLION DOLLARS, HOW DOES THAT IMPACT OUR LIABILITY? WHAT, WHAT WOULD A MILLION DOLLARS DO? DOES IT JUST TAKE A MILLION DOLLARS SORT OF OFF THE TOP OF WHAT WE OWE? SO UNFORTUNATELY A MILLION DOLLARS ISN'T GONNA DO MUCH.
I KNOW
UM, HOW, HOW ABOUT WE TALK ABOUT A HUNDRED MILLION? OKAY.
IF, IF, IF WE DO SOMETHING WITH A HUNDRED MILLION DOLLARS, THEN WHEN I TALKED ABOUT THE THREE ELEMENTS OF THE A DC IN THE BEGINNING MM-HMM
RIGHT? WE WOULD, WE WOULD SET A NEW AMORTIZATION SCHEDULE FOR THAT FROM THE POINT THAT WE MAKE THAT CONTRIBUTION.
DO WE GET TO SUBTRACT A HUNDRED MILLION? YES, IT WOULD, IT WOULD, IT WOULD REDUCE OUR, OUR COST.
LIKE IF, IF YOU, THAT'S WHAT YOU HAVE A MORTGAGE PAYMENT AND YOU MAKE A BIG PRINCIPAL PAYMENT.
BUT SOMETIMES YOU CAN GET PENALIZED FOR DOING THAT
WELL, SO JUST WANNA MAKE SURE THERE'S NO PENALTY HERE FOR COMING IN WITH A HUNDRED MILLION.
I DON'T THINK THERE'S A PENALTY.
UM, AND I, I HAVE QUESTIONS ABOUT THE COLA.
I MEAN, I, I AM, UM, SUPPORTIVE OF IT.
I THINK IT'S IMPORTANT AND FOR MANY OF THE REASONS THAT HAVE ALREADY BEEN STATED, I WON'T RESTATE THAT.
UM, I DO THINK YOU COULD DO THE 13TH PAYCHECK POTENTIALLY IN THIS EARLY PART WHERE WE'RE TRYING TO GET OUR SEA LEGS AND, AND POTENTIALLY, YOU KNOW, MAKE SOME LARGER PAYMENTS.
CAN YOU DO COLAS WHERE IT'S NOT LIKE SAY 5% EVERY YEAR, CAN YOU DO FIVE? CAN YOU DO A COLA THAT'S 5% EVERY FIVE YEARS, EVERY SEVEN YEARS? SOMETHING LIKE THAT? YES, YOU COULD.
UH, I MEAN, NOT BASED ON HOW HOUSE BILL 31 58 IS CURRENTLY STRUCTURED.
IT IS, THERE'S A FORMULA IN IT THAT SAYS WE'RE 70% FUNDED AND THEN YOU TAKE THE RATE OF RETURN MINUS FIVE AND THAT'S HOW THEY GET TO THE 1.5%.
UH, IF WE DID SOMETHING DIFFERENT THAN THAT, THEN UH, I THINK WE CAN INTRODUCE THAT.
UH, LIKE WE'VE INTRODUCED, UM, A POTENTIAL ONE TO 4% ONE TIME COLA.
UM, AND, AND I THINK THERE'S WAYS TO DO THAT.
THAT'S OUTSIDE OF THE HOUSE BILL 31 58.
BUT I'M LET TAMMY, IF YOU WANT TO, YOU, YOU COULD.
YEAH, I WOULD JUST ENCOURAGE US TO BE AS CREATIVE AS POSSIBLE IN THAT, UM, TO DO WHAT WE CAN AFFORD UNDERSTANDING THAT, THAT I, I BELIEVE WE'VE MADE A PROMISE TO THEM THAT WE WOULD, YOU KNOW, HAVE A COLA AT SOME POINT.
UM, AND I THINK SOONER, WHATEVER WE CAN DO AT THE SOONEST POINT IN TIME, I WOULD SUPPORT.
BUT I THINK WE DO HAVE TO, TO PLAN FOR THE FUTURE AND HOPE THAT OUR NUMBERS ARE STRONG AND UM, AND THE FUND IS PERFORMING WELL SO THAT WE COULD THEN ALSO, UM, CONTINUE THAT COLA 'CAUSE LIFE IS GETTING MORE EXPENSIVE.
UH, JACK, UH, QUESTION IS, OKAY.
AND IT'S REALLY MORE OF A, I I DON'T KNOW IF IT'S A A A GENERAL QUESTION OR NOT, BUT IT, IT CENTERS AROUND IN EACH ONE OF THESE SCENARIOS AND I'M ASSUMING, OR MAYBE PERHAPS REQUESTING THAT ON THE MAY 15TH, UM, UH, BRIEFING THAT WE ARE ABLE TO SEE HOW THESE SCENARIOS WOULD, WHAT THE SACRIFICE WOULD BE, UH, TO THE, TO THE OVERALL BUDGET.
I SEE THE DOLLAR AMOUNTS, BUT AS WE GET INTO THAT, THEN WE GOTTA START MAKING THOSE DECISIONS.
AND WHAT DOES THAT LOOK LIKE IN TERMS OF AN IMPACT TO THE BUDGET, I GUESS? WELL, IF, IF I CAN ASK, CAN WE GO TO THE ONE PAGE IN THE APPENDIX? SO THIS, YOU MAY HAVE TO LOOK AT YOUR SCREEN.
'CAUSE THIS WAS UPDATED FROM WHAT I EMAILED TO THE COMMITTEE MEMBERS LAST NIGHT.
UM, SO WHAT I DID IS JUST A COUPLE OF DIFFERENT SCENARIOS HERE.
UM, WHICH THIS ISN'T THE MOST RECENT,
[01:15:01]
BUT WE, WE'LL TALK FROM THIS.UH, THIS IS LOOKING AT THE $67 MILLION IF WE NEEDED TO COME UP WITH AN ADDITIONAL $67 MILLION.
THIS IS JUST THE MATH, OKAY? I REALIZE THAT THERE'S DECISIONS AND, AND WHAT GOES INTO THIS, BUT HOW DOES THE MATH WORK? WELL, WE WOULD NEED TO CUT 3.5% FROM ALL GENERAL FUND DEPARTMENTS TO GET TO $67 MILLION.
OR ANOTHER WAY YOU COULD DO IT IS IF YOU DIDN'T WANT TO CUT AS MUCH FROM POLICE AND FIRE.
'CAUSE A LOT OF TIMES WE HOLD THEM HARMLESS.
WE CUT 2% FROM POLICE AND FIRE, THAT'S 23 MILLION.
AND WHEN, THEN WE WOULD HAVE TO CUT 5.7 FROM ALL OF THE NON-POLICE AND FIRE DEPARTMENTS TO GET TO 67 MILLION.
ALL THE WAY DOWN TO, IF YOU DIDN'T WANT TO CUT ANYTHING FROM POLICE AND FIRE, YOU WOULD NEED TO CUT 8.5% FROM ALL THE OTHER GENERAL FUND DEPARTMENTS TO GET TO $67 MILLION.
THAT'S A FORMULA THAT YOU HAVE TO MAKE DECISIONS ABOUT THAT.
AND DO YOU DO THAT BY JUST SAYING EVERYBODY CUTS AN EVEN PERCENT OR YOU DO THAT MORE STRATEGICALLY AND YOU, YOU CUT A MUCH LARGER PERCENT FROM ONE DEPARTMENT AND A SMALLER PERCENT FROM ANOTHER DEPARTMENT? HOW DO YOU APPROACH THAT? BUT JUST THE MATH, THAT'S HOW IT WORKS.
AND THAT'S WHAT I WAS LOOKING FOR THERE, JACK.
AND THAT'S ALL I HAVE AND, AND I KNOW THAT'S NEVER POPULAR, BUT JUST 'CAUSE I DO THE MATH, THE, UM, A TAX RATE EQUIVALENT OF $67 MILLION IS 3.25 CENTS.
IT'S A BIG NUMBER ON THERE AS WELL.
JACK, I'M GLAD YOU BROUGHT THAT UP BECAUSE WE DISCUSSED THAT YESTERDAY AND THE DAY BEFORE.
AND, AND THOSE ARE NUMBERS THAT COLLEAGUES THAT I DID REQUEST THAT, HEY, IF YOU DO, UH, HAVE A TRADITION TO SIX OR $7 MILLION, WHAT DO YOU HAVE TO CUT? MM-HMM
AND INSTEAD OF TRYING TO SAY DEPARTMENT, THEY JUST PUT PERCENTAGE, YOU KNOW, PERCENTAGE OR X DOLLARS OR CUT FOR A DEPARTMENT, WHATEVER.
AND THOSE ARE THE NUMBERS THAT I'VE BEEN LOOKING FOR FROM DAY ONE.
YOU KNOW, HOW DO YOU GET THERE? THEN WHEN WE TRY TO DO THAT, WHEN WE BUILD OUR BUDGET, WE ARE BUILDING THE BUDGET AROUND THE POLICE AND FIRE PENSION.
RIGHT NOW WE ARE BUILDING THIS BUDGET AROUND THAT.
WE'RE STARTING OUT WITH A, A HIGH NUMBERS, WHICH IS $184 MILLION.
AND TO GET, YOU KNOW, TO THE TRADITION OR STEP UP A STEP DOWN, UH, THE, UH, THE, THE, THE COST OF LIVING THE COLA OR THE SUPPLEMENTAL BENEFIT IS GONNA SAY WHAT DO YOU CUT AND HOW TO GET THERE? AND ALSO YOU GOTTA LOOK AT THAT ON OUR BUDGET, WHEN A CITY MANAGER DO THEIR BUDGET, HE'S GONNA DO A TWO YEAR BUDGET, BUT THIS NOT FORECAST IN A TWO YEAR BUDGET.
OKAY? NOT, IT'S NOT FORECAST AT ALL.
SO I'M TRYING TO MAKE SURE I UNDERSTAND THIS IS NOT FORECAST AT ALL BECAUSE IT'S GOING TO ANOTHER BUDGET.
SO YOU EXPLAIN THAT, JACK, SO EVERYBODY KNOW THIS IS NOT IN THE BUDGET.
THAT IN, UH, FISCAL YEAR 25, WE ONLY HAVE FACTORED IN ABOUT A $6 MILLION INCREASE OVER THE CURRENT YEAR FOR THE PENSION COST, NOT 67 MILLION.
SO REGARDLESS OF WHICH SCENARIO WE GO WITH, WE ARE GOING TO HAVE TO MAKE SOME DECISIONS OF HOW WE FUND THAT.
AND AGAIN, THESE ARE JUST THE NUMBERS ABOUT IT.
IT'S, IT'S NOT PROPOSED TO BE A RECOMMENDATION OF ANY SORT.
JUST WANTED YOU TO HAVE A GUIDE.
I JUST WANNA CLARIFY, I DIDN'T WANNA JUMP AHEAD.
YOU, MS. WILLIS COULD GO AHEAD IN SECOND ROUND.
EVERYBODY GET TWO MINUTES AND WE CAN, OKAY.
WELL I'M HAVING A, A, A DIFFERENCE OF OPINION I GUESS.
'CAUSE I WAS AT THE MEETING THIS MORNING AND I DON'T THINK THERE'S A RADICAL DIFFERENCE BETWEEN WHERE THE FUND IS AND WHERE THE CITY IS.
IN FACT, THIS WAS ACKNOWLEDGED BY THE BOARD MEMBERS, UM, AT THE END SAYING, GOSH, I THOUGHT WE'D BE SO MUCH FARTHER APART AND WE'RE ACTUALLY CLOSER TOGETHER THAN, THAN THEY THOUGHT.
AND SO THAT WAS A VERY PROMISING, UH, WAY TO END THAT ITEM.
UM, ON PAGE SEVEN OF THEIR PRESENTATION, IT DOES OUTLINE THE, THE TRADITIONAL OPTION, WHICH IS THE IMMEDIATE POP OF THAT $67 MILLION, BUT IN SOME RECOGNITION OF THE FACT THAT THE CITY DOES HAVE BUDGETARY OBLIGATIONS GREATER THAN THIS.
THE THIRD YEAR STEP UP WAS ALSO INCLUDED ON THE PAGE TITLED STAFF RECOMMENDATION.
AND, UM, IT SAYS, YOU KNOW, PROVIDES BUDGET RELIEF TO THE CITY, UM, AND IT HAS SOME OTHER BULLET POINTS.
AND SO THAT IS VERY MUCH ON THE STAFF RECOMMENDATION PAGE, WHICH I APPRECIATE AND IS NOT TOO FAR OFF FROM WHERE WHAT YOU'RE PRESENTING TO US TODAY AS THE FIVE YEAR.
SO THAT IS CLOSER AND THE BOARD, UM, THAT DID NOT SLIP BY THAT BOARD.
UM, THE OTHER THING I WOULD NOTE IN THIS PRESENTATION, THIS PAGE 19, THE STAFF RECOMMENDATION ON COLA NUMBER ONE IS THE LONG-TERM HEALTH OF THE FUND IS TOP PRIORITY OF THE BOARD.
THE BOARD AGREES WITH CHIRON THAT HAVING AN ADEQUATE COLA IS ALSO AN IMPORTANT ISSUE FOR THE MEMBERS BOTH ACTIVE AND RETIRED.
[01:20:01]
BOARD INDICATED THAT MODIFYING THE COLA IS SECOND ONLY TO ENSURING THE LONG-TERM HEALTH OF THE FUND.AND SO THIS HAS BEEN SAID IN MORE THAN ONE BOARD MEETING.
I KNOW TRUSTEE MALVO AND SOME OTHERS HAVE RAISED THAT ISSUE ABOUT FUND HEALTH FIRST COLA SECOND.
UM, THAT SAID, UH, THERE'S ANOTHER IMPORTANT DISTINCTION WHEN WE KEEP BRINGING UP THE ERF.
IT IS 72.1% FUNDED AND THE POLICE AND FIRE PENSION FUND IS 39.1% FUNDED.
THAT IS A 33% GAP BETWEEN THOSE TWO FUNDS.
HOWEVER, ONE THING I REALLY LOVE ABOUT TODAY'S PRESENTATION IS THE FACT THAT THERE ARE REALITIES OF LIVING, UM, THAT THESE RETIREES WHO HAVE SERVED THE CITY ARE FACING.
AND SO, UH, I APPRECIATED THE CREATIVITY OF A 13TH CHECK OR SOME OPTIONS THAT ARE COMING IN THAT, UM, CAN HELP THE CITY FULFILL OUR MUCH MORE BROAD OBLIGATIONS, YET ALSO BE RESPONSIVE, UH, AND NOT HAVING PEOPLE FEEL LIKE THEY'RE NOT BEING HEARD BECAUSE YOU ARE BEING HEARD.
BUT, UM, I, I, LIKE, I WASN'T SURE, I FELT A LITTLE HELPLESS IN WHAT CAN BE DONE TO SHOW, UH, THAT WE DO HEAR THAT AND THAT WE DO CARE ABOUT THAT.
AND SO I APPRECIATE THE COUPLE OF OPTIONS YOU'VE LAID OUT AND I I THINK WE NEED TO EXPLORE THOSE THINGS.
BUT TO THE POINT BEING MADE ABOUT OUR BUDGET, WE CONTINUE TO VOTE ON THINGS AND PASS PET PROJECTS AND HAVE THINGS LIVING IN THE CITY'S BUDGET THAT WE FRANKLY NEED TO REHOME AND FIND A DIFFERENT OWNER, WHETHER IT IS THE COUNTY OR IT'S, UM, YOU KNOW, NONPROFIT OR WHEREVER.
THIS IS GONNA BE A TOUGH YEAR BUDGET WISE.
AND SO WE ALL NEED TO THINK ABOUT THIS WHEN WE'RE LOOKING AT THESE PROGRAMS AND, UM, THINK REALLY HARD ABOUT WHAT COULD LIVE ELSEWHERE.
UM, THAT CAN, THE IDEA CAN BE HERE AND SOME OF THE THINKING CAN BE HERE AT THE CITY OF DALLAS, BUT THE FUNDING MAY NEED TO COME FROM SOMEPLACE ELSE SO THAT WE CAN FULFILL THIS COMMITMENT.
UM, I'LL SHARE THOSE SENTIMENTS.
UH, IT'S GONNA BE TOUGH THIS UPCOMING YEAR AND, UH, YEARS AFTER, AFTER THAT.
AND, UH, WE'RE GONNA HAVE TO MAKE SOME DIFFICULT DECISIONS.
AND, UH, JUST WANTED TO SAY I'M COMMITTED, UH, TO CONTINUING TO FIND A SOLUTION.
I THANK YOU FOR THE VARIOUS, UH, DIFFERENT, UH, PROPOSALS AND, UH, UH, THANK, UM, OUR PUBLIC SAFETY TEAM FOR BEING IN THE AUDIENCE TODAY.
AND, UH, THANK Y'ALL FOR YOUR COMMENTS AND WE LOOK FORWARD TO CONTINUING TO WORK WITH Y'ALL.
UM, SO I DO HAVE SOME QUESTIONS ON THE NUMBERS THAT YOU GAVE US.
WHAT ASSUMPTIONS ARE BEING MADE? LIKE IS IT HIRING ASSUMPTIONS FUND, UH, RETURNED ASSUMPTIONS? I'M JUST, UH, BECAUSE THAT CAN ALSO, WOULD THAT CHANGE, UH, THE AMOUNTS AND SUCH? Y YES.
I MEAN THERE'S, THERE'S A WHOLE LOT OF DIFFERENT ASSUMPTIONS THAT GO, THAT GO INTO THE ACTUARIAL ANALYSIS, UM, FROM AGE OF RETIREMENT AGE OF WHEN SOMEONE WHAT DID PASSES AWAY.
BUT WHEN YOU'ALL USE TO RUN THE NUMBERS, SO I, I DON'T KNOW THAT LEVEL OF DETAIL ON THAT.
BUT ON THE RATE OF RETURN, AS I MENTIONED EARLIER, THE, UH, ASSUMED RATE OF RETURN IS 6.5%.
OVER, YOU KNOW, THE LONG TERM, YOU'RE GONNA HAVE SOME YEARS THAT ARE BETTER AND SOME YEARS THAT WORSE, RIGHT? RIGHT, RIGHT.
BUT THE, THE GOAL IS TO ACHIEVE 6.5%.
SO ARE WE HIRING AT OUR LEVELS? AND SO, NO, UM, AT BOTH OF THEM, AT BOTH FIRE AND DPD, I BELIEVE WE'RE HIRING BETTER ON THE FIRE DEPARTMENT SIDE THINK FIRE'S.
SO THERE'S DOES, SO A FUND DOESN'T SEEM TO BE PREVENTING PEOPLE FROM COMING INTO THE FIRE DEPARTMENT AND AND MY UNDERSTANDING IS THERE'S A NATIONAL ISSUE WITH RECRUITMENT AND POLICE.
SO THIS ISN'T THE ONLY FACTOR BECAUSE I GUESS THAT'S WHAT'S THE IMBALANCE TO SAY THAT, UH, WE CAN'T RECRUIT FOLKS.
I MEAN THE, THERE'S JUST A, A NATIONWIDE ISSUE ON ONE END OF THAT EQUATION, BUT IT SEEMS LIKE OUR STAFFING LEVELS ARE ON FIRE.
AND I'M JUST TRYING TO UN I MEAN I'M NOT ON PUBLIC SAFETY OR ANYTHING, BUT I'VE THOUGHT THERE WAS A, THAT WE ARE OKAY IN THE FIRE PART.
AND ONE THING THAT I'LL SAY IS, UH, OUR MEET AND CONFER AGREEMENT WITH OUR ACTIVE EMPLOYEES HAS, HAS BEEN REALLY GOOD CHANGING TO A MARKET STUDY TO, TO TRY TO KEEP UP WITH THE MARKET.
AND SO WE MADE CERTAIN ASSUMPTIONS FOR FISCAL YEAR 25.
AND WHEN WE COME OUT WITH THE BUDGET, YOU WILL SEE THAT IT IS SIGNIFICANTLY HIGHER THAN WE PROJECTED IT TO BE.
SO WE ARE REALLY MOVING UP THE STARTING PAY FOR POLICE AND FIRE.
AND THAT AFFECTS THE ASSUMPTIONS I OR THAT RIGHT, RIGHT, RIGHT.
AND I KNOW THAT, UM, HIRING DOES, YOU KNOW, MEETING THOSE NUMBERS IS VERY CRITICAL TO MAKE THIS ALL WORK.
AND SO, AND THAT'S WHY FOR THIS YEAR I AM SUGGESTING THAT WE GO AHEAD AND CONTRIBUTE TO THE FUND THE FULL 180 5 AND NOT LET ANY LAG IN HIRING AFFECT OUR CONTRIBUTION THIS YEAR.
AND THERE'S NOTHING THAT SAYS WE CAN'T EVEN DO A LITTLE BIT MORE THAN THAT IF WE HAVE, IF WE HAVE THE WILL OF THE BODY.
[01:25:01]
MEDICINE.UM, SO I GUESS MY FIRST QUESTION FOR YOU IS, UM, JACK, YOU HAD MADE A COMMENT, UM, ABOUT THE ERF SAYING THAT THE CPI ISN'T PART OF THE ERF COLA.
I MEAN, THAT IS PART OF THE COLA CONSIDERATION FOR ERF, ISN'T IT? OH, I'M SORRY, I I MISSPOKE IF I SAID THAT.
FOR E-R-F-C-P-I IS A FACTOR IN, IN THEIR CALCULATION.
UM, AND YOU, YOU WERE CORRECT IN YOUR COMMENT EARLIER THAT THERE'S A TIER A THAT IS CAPPED AT 5%.
THERE'S TIER B THAT'S CAPPED AT 3% THE LONG TERM.
'CAUSE I, I LOOKED BACK TO 1995, AND SO FOR 30 YEARS, THE ERF COLA HAS BEEN AN AVERAGE OF 2.7%.
IF I LOOK AT THE SAME 30 YEAR PERIOD FOR DPFP, THE AVERAGE HAS BEEN 2.9 BECAUSE THAT FACTORS EIGHT YEARS THAT THE STATE SAID DON'T GIVE A COLA.
SO EVEN WITH THE EIGHT YEARS OF NOT GIVING ANYTHING IN DPFP, THE AVERAGE OVER 30 YEARS IS 2.9 COMPARED TO 2.7 FOR THE ERF.
SO THERE'S BEEN COMMENTS MADE ABOUT THE LEVEL OF FUNDING BETWEEN THE TWO PLANS AS IF THAT SHOULD, UM, SOMEHOW INDICATE THE BENEFIT FOR THE MEMBER.
DID THE ERF MEMBER DO ANYTHING SPECIAL TO MAKE THAT BE 70% FUNDED? DID THE DPD OR DFR MEMBER OF THAT PENSION DO SOMETHING THAT CAUSED THAT FUNDING TO BE SO LOW? SO HISTORICALLY, UH, ERF HAS HAD A HIGHER CONTRIBUTION RATE FROM THE EMPLOYEES THAN DPFP HAS.
IT'S ONLY BEEN SINCE THE CHANGE IN HOUSE BILL 31 58 THAT THE, UH, CONTRIBUTION RATE FROM THE EMPLOYEES FOR POLICE AND FIRE HAVE CAUGHT UP TO WHAT, UM, ERF EMPLOYEES CONTRIBUTE.
AND I WOULD SAY THAT SOME OF THE PAST PERFORMANCE OF THE FUND THAT WAS PARTLY MANAGED BY POLICE AND FIRE HAS PART LED US TO WHERE WE ARE.
BUT THE MEMBER THEMSELF, ARE THEY RESPONSIBLE FOR THAT? UH, OTHER THAN THEIR CONTRIBUTION RATES, UH, BEING DIFFERENT? NO, MA'AM.
SO MY GUESS MY LAST THING IS REALLY, UM, TO GIVE YOU THIS INPUT THAT UNLIKE NORMAL BUDGETS WHERE YOU'RE PROPOSING A DRAFT TO US WITH THE TWO YEARS, I THINK WHEN WE HAVE THIS BUDGET, UM, BRIEFING, WHAT YOU'RE HEARING IS, WELL, WE WANNA SEE WHAT THE BUDGET WOULD LOOK LIKE IF WE DID THE TRADITIONAL PLAN, WHAT WOULD IT LOOK LIKE IF WE DID THE THREE YEAR RAMP UP? YOU KNOW, I DON'T KNOW IF PEOPLE WANNA SEE THE FIVE YEAR RAMP UP, BUT WHEN YOU'RE SAYING WE HAVE TO HOLD HANDS AND, AND AGREE ON A PLAN, WE'VE GOT A PENSION THAT'S OFFERING MULTIPLE CHOICES, MULTIPLE CHOICES OF RECOMMENDATIONS THEY COULD LIVE WITH FOR, FOR THE ADEC, MULTIPLE CHOICES FOR COLA.
AND I HOPE THAT WE'RE GONNA LOOK AT THAT AND SEE IF THERE ISN'T SOMETHING ON THAT MENU THAT WE LIKE.
THE OTHER THING IS THAT THEY PRESENTED SOME NEW IDEAS ON COLA THAT I'VE NEVER THOUGHT OF THAT PERHAPS YOU THINK WOULD BE, UM, SUITABLE.
I DON'T KNOW IF YOU'VE LOOKED AT 'EM AND SEEN THOSE NUMBERS, BUT I THINK WE'RE LOOKING FOR, I'M LOOKING FOR A DIFFERENT KIND OF BUDGET BRIEFING THIS YEAR, AND I HOPE THAT YOU'RE GONNA GO BACK AND INSTEAD OF JUST GENTLY ASKING DEPARTMENTS LIKE, WHAT WOULD YOU DO WITH A 10% REDUCTION? LIKE, WE NEED TO SEE THAT IN THE BUDGET AS ONE OF OUR DRAFTS.
AND SO, UM, THANK YOU CHAIRMAN.
OKAY, JACK, I, I GUESS, UM, I WANNA TRY TO LEAVE ON A, ON A POLICY NOTE.
UH, I THINK, UM, THE CHAIRMAN OF THE BOARD, MR. MARY, UH, I THANK, UH, KELLY, UH, I THANK YOU AND, AND KELLY WORKING TOGETHER.
I THINK, UH, I SEE THE ATTORNEY AND JOSH MON WORKING TOGETHER AND, AND, AND WE HAVE TO WORK TOGETHER IN ORDER TO SOLVE THIS PROBLEM.
IT'S NOT THE PENSION BOARD AND NOT THE COUNCIL.
BUT AT THE END OF THE DAY, WE AS A CITY AND A TAXPAYER GOT TO SACRIFICE TO MAKE SURE THAT WE CAN PAY THE BILL.
AND TO DO THAT, WE GOTTA BE OPEN AND TRANSPARENT TO ALL THE TAXPAYERS.
WHATEVER WE DECIDE TO DO, WE SHOULD BE OPEN AND TRANSPARENT AND SEE HOW WE GET THIS RESOLVED.
AS I STATED EARLIER TODAY, I FEEL LIKE WE, WE, WE START ON THE SAME FOUNDATION.
AND AGAIN, KELLY, THANK YOU FOR YOUR PRESENTATION TODAY.
I LOOK AT IT AND I FEEL LIKE THAT I NEED TO TELL EVERYONE UP THERE, RETIREES, UH, OUR CURRENT UNIFORM EMPLOYEES, WE ARE ON THE SOUND FOUNDATION RIGHT NOW.
ONLY THING WE ADD TO THE FOUNDATION, CAN WE ADD A SWIMMING POOL OR AN
[01:30:01]
EXTRA ROOM, YOU KNOW, AN EXTRA, YOU KNOW, WE, WE TRYING TO GET THAT DONE.WE CAN SATISFY THE STATE PENSION BOARD.
WE CAN PUT IT IN THE MAIL, SEND IT OFF AND GET IT DONE.
BUT I DON'T SEE THAT, UH, IT'S A COMPROMISE.
I THINK WE AS A PUBLIC SERVICE, PUBLIC SAFETY, THAT WE CAN DO MORE.
AND HOW WE DO MORE, WE GOTTA, YOU KNOW, WORK TOGETHER.
AND WITH THAT, JACK, I I, I'M GONNA ASK YOU OVER THIS QUESTION RIGHT HERE IN THIS BUDGET COMING OUT, THERE SHOULD BE SOME GUIDELINES THAT SHOULD COME FROM THIS BOARD HERE, THIS AD HOC COMMITTEE.
AND I'M TELLING YOU RIGHT NOW, WE WANT TO KNOW IF WE DO THIS, IF WE DO A COLA, A ONE TIME COLA OR THE SUPPLEMENT OF PAY, UH, A 4%, 1% OR WHATEVER, WHAT IT COST OF A YEAR, ONE YEAR, TWO, YEAR, FOUR, YEAR FIVE, IF THE MARKET GO DOWN, DO WE STILL GOTTA PAY? DO THE MARKET GO UP OVER THE 6.5%? HOW DO WE FUND IT? AND AND I'D ASKED YOU TO GET WITH KELLY AND, AND, AND ALSO LOOK AT HOW DO WE BALANCE THIS OUT.
I THINK THAT WE BOTH GOTTA WORK TOGETHER TO THE BUDGET AND HOW DO WE BALANCE OUT? SO IF YOU CAN GET WITH KELLY AND GET WITH THEM, AND ALSO WE LOOK AT ALSO WITH TIME, WITH WITH ATTORNEYS.
IT'S A LEGISLATIVE, LEGAL ISSUE.
THAT'S SOMETHING THAT YOU AND JOSH LEY LOOK AT AND KEEP US ON, ON TARGET.
LEGALLY, WHAT WE CAN DO, WE CANNOT DO.
AND I THINK, UH, THE CHAIRMAN, UH, MARY AND MYSELF, WE GONNA WORK TOGETHER WITH HIS BOARD AND, AND MY AD HOC COMMITTEE WORKING TOGETHER.
SO JACK, CAN YOU TELL ME HOW YOU AND KELLY CAN WORK IT OUT? HOW DO WE CAN SAY, YOU KNOW, STEP THROUGH YOUR STEP UP FIRE, YOUR STEP UP A TRADITION, YOU KNOW, COME HERE AND I UNDERSTAND, YOU KNOW, EVERYBODY SAID NOVEMBER OR JUNE, WHATEVER, BUT HEY, IF WE REALLY SERIOUS WANT TO GET SOMETHING DONE, WE CAN GO TO THE BACK ROOM AND GET IT DONE NOW.
I MEAN, WHY COULD JUST KICK, KICK THE CAN DOWN THE ROAD? YOU KNOW, THE PEOPLE WHO RETIRED, THEY WANNA KNOW, WOW, I CAN GET AND MY IN MY CHECK ON THE FIRST AND 15TH WHAT I CANNOT GET.
AND SO I DON'T WANNA GO BACK TO WHAT HAPPENED SEVEN YEARS AGO, BUT TODAY IS A NEW DAY.
BUT HOW DO WE GO FORWARD AND TO MAKE SURE THAT WE UNDERSTAND WHAT COMMITMENT THAT WE ARE TRYING TO GET DONE? YEP.
UH, WE ARE COMMITTED EXACTLY AS YOU'VE VOICED TO, TO GET THAT DONE.
AND I, I JUST WANTED TO ACKNOWLEDGE THAT ALTHOUGH, UM, CITY MANAGER, UH, MR. BROAD NECK AND DEPUTY CITY MANAGER, UH, KIM TOLBERT ARE NOT IN THE ROOM, THEY ARE ONLINE AND THEY, THEY'VE BEEN HEARING PART OF THE CONVERSATION AS WELL.
AND SO I JUST WANTED TO ACKNOWLEDGE THAT THEY'VE BEEN HERE, ALTHOUGH NOT IN PERSON.
SO WHICH ONE IS ONLINE? IS TC BROUGHT THAT ONLINE OR KIMBERLY? DEPUTY KIMBERLY TOLD ONLINE.
WHICH ONE IS ONLINE? THEY BOTH HAVE BEEN ONLINE.
UH, ARE THEY ONLINE NOW? I AM NOT SURE THEY'RE STILL THERE, BUT YEP.
IT LOOKS LIKE THEY'RE POPPING UP.
CHRIS, CAN WE SEE IT'S ONE OF THOSE ONLINE? IT'S STILL ONLINE.
SO TC, UM, YOU KNOW, WE MET YESTERDAY AND, AND WE, WE MET, UH, WITH DEPUTY MAYOR APPROACH HIM.
I MEAN DEPUTY, UM, ASSISTANT MANAGER, KIMBERLY TOBRA YESTERDAY.
UH, YOU GOT ANY INSIGHT? I KNOW YOU'VE BEEN HEARING WHAT'S GOING ON, SO I REALLY PREFER TO HEAR SOMETHING FROM YOU.
UH, CAN YOU HEAR ME? YOU SPEAK A LITTLE LOUDER.
CAN YOU HEAR ME? YES, I CAN HEAR YOU NOW.
SO DEFINITELY HER, THE SENTIMENTS OF THE CITY COUNCIL, MYSELF AND KIMBERLY BERT ARE ONLINE.
UH, AND I THINK AS SHE WILL PREPARE THE BUDGET WORKING WITH JACK, I THINK, UH, THE SCENARIOS THAT COUNCIL ASKS, UH, THEY'LL DEFINITELY BE ABLE TO PROVIDE.
UH, AGAIN, I THINK AS COUNCILWOMAN WILLIS POINTED OUT, I THINK WE'RE NOT TOO FAR APART FROM THE BOARD, UH, WHO OBVIOUSLY HAS A FIDUCIARY RESPONSIBILITY, UH, IN THEIR RECOMMENDATIONS, BUT UNDERSTANDING, TRYING TO BALANCE THE CURRENT RETIREES WITH THE EXISTING EMPLOYEES, THE FIRST AND FOREMOST IMPORTANT MATTER IS REALLY MAKING SURE THAT THE FUND IS SOLVENT.
BUT IF IN FACT THERE'S AN OPPORTUNITY, UH, TO PROVIDE ANY TYPE OF COLA, UH, TO HELP CURRENT RETIREES, I THINK THE COUNCIL WILL HAVE THOSE OPTIONS AND WE LOOK FORWARD TO PARTNERING TO FIND A WAY TO MAKE SURE WE CAN DO THOSE THINGS.
UH, I SEE CHAIRMAN BALL DO IT, YOU KNOW, THE LINES AND, AND CHAIRMAN, YOU KNOW, WE OPEN EVERYONE.
YOU DON'T HAVE ANYTHING TO SAY.
I'LL GIVE YOU OPPORTUNITIES TO SAY SOMETHING.
I WILL, UH, FIRST JUST SAY THANK YOU FOR YOUR LEADERSHIP, UH, TO GET US TO THIS POINT.
I THINK THAT THERE'S BEEN A LOT OF CORRALLING AND I THINK YOU'VE DONE A GREAT JOB IN, UM, KEEPING US FOCUSED.
UM, I, UH, I I I WANT TO JUST SAY DITTO TO THE THREE MINUTE ROUND OF, UH, COUNCIL MEMBER WILLIS.
[01:35:01]
VERY WELL, UM, MY SENTIMENTS.I JUST HAVE A QUESTION THOUGH, FOR, FOR JACK, UM, SPECIFICALLY ON THE, UH, SCENARIOS THAT YOU GAVE IN THE APPENDIX THAT LAYS THAT YOU HAD UP, THAT, UH, LAYS OUT, UM, WHAT IT WOULD LOOK LIKE.
UH, AND THEN RELATING TO THE QUESTION, UM, COUNCIL MEMBER BLACKMAN MADE ON THE, UM, ASSUMPTIONS, WAS THIS ASSUMING THE SAME LEVEL OF REVENUE, UM, AND, AND IF NOT, WHAT WITH HOW, WITH HOW WE'VE SEEN SUCH DRASTIC DAMAGE OVER THE LAST SEVERAL YEARS? UM, CAN YOU EXPLAIN HOW YOU'VE COME TO THAT NUMBER AND IS AND YES, SIR.
UM, AND YOU WERE SPEAKING TO WHAT WAS IN THE APPENDIX THAT WE PULLED UP? YES, SIR.
SO, UM, THOSE NUMBERS WERE BASED ON WHAT IS CURRENTLY THE FY 25 PLANNED BUDGET THAT WE BALANCED LAST YEAR, WHICH DID INCLUDE SOME GROWTH IN PROPERTY TAX, SOME GROWTH IN SALES TAX, UH, AND OTHER COSTS THAT WE HAD FACTORED IN.
AND SO, UH, JUST USING THE, UM, THE PLANNED BUDGET FOR THE POLICE DEPARTMENT AND THE FIRE DEPARTMENT, WHICH ARE $1.1 BILLION COMBINED AND FOR THE NON-POLICE AND FIRE DEPARTMENTS, UH, TOTAL $784.9 MILLION, JUST WHAT TYPE OF REDUCTION WOULD BE NECESSARY TO GET TO 67 MILLION AND THAT WOULD BE A 3.5% ACROSS THE BOARD.
UM, OR IF WE DON'T CUT ANYTHING FROM POLICE AND FIRE, IT WOULD REQUIRE AN EIGHT POINT.
I, I, NO, YOU'RE, YOU'RE FINE.
I, I GET THAT WHAT I'M ASKING.
UM, YOU ANSWERED IT SOMEWHAT, BUT THERE, I GUESS NOW MY FOLLOW UP QUESTION WOULD BE IS ARE WE ON, UM, UH, TREND TO, UM, INCREASE REVENUE FROM WHAT WAS PROPOSED, UH, ON THE TWO YEAR BALANCED BUDGET? OR WHAT DOES THAT GROWTH LOOK LIKE AT CURRENTLY? THANK, THANK YOU.
AND I APOLOGIZE FOR NOT GETTING THAT RIGHT THE FIRST TIME.
SO, UH, YES, I THINK WE'RE ON TRACK TO THE REVENUES THAT WE FORECAST IN THE PLANNED BUDGET.
WE HAD PULLED BACK ON OUR SALES TAX PROJECTIONS AND DID NOT CONTINUE TO ASSUME THE SAME LEVEL OF GROWTH THAT WE HAD COMING OUT OF THE PANDEMIC.
AND THUS FAR THIS YEAR, WE ARE PRETTY MUCH ON TRACK WITH WHAT WE HAD BUDGETED FOR THIS YEAR.
SO I THINK, UH, NEXT YEAR IS PROBABLY THE SAME.
UM, SO, UH, I'M GLAD THAT WE DIDN'T, UM, CONTINUE TO ASSUME GROWTH THERE IN THE SALES TAX BECAUSE IT IS COME BACK DOWN SOME FROM WHERE THE LEVEL OF GROWTH THAT WE WERE SEEING.
SO, UH, I THINK OUR REVENUE PROJECTIONS ARE, ARE STILL GOOD AT THIS POINT.
UH, WE WILL CONTINUE TO LOOK AT THOSE AND UPDATE YOU IN MAY IF THERE'S ANY CHANGES WHEN WE DO THAT BUDGET PRESENTATION ON MAY 15TH.
UM, WELL THANK YOU FOR THAT ANSWER.
I, UM, I WILL JUST LEAVE THAT I, UH, WOULD, WOULD SAY THAT I SUPPORT US, UH, LOOKING FOR ALTERNATIVE REVENUE SOURCES AS WELL.
WE'VE DISCUSSED THIS, UM, SEVERAL TIMES.
I THINK THAT THESE PLANS ULTIMATELY LAY OUT WHAT A WORST CASE SCENARIO WOULD BE, BUT I, I HOPE THAT THIS COUNCIL IS COMMITTED TO LOOKING MORE INNOVATIVELY, UM, MONETIZING ASSETS THAT ARE JUST SITTING HERE, UH, THAT CAN HELP US BE IN A BETTER CASE SCENARIO THAN WHAT IT IS, UH, THAT'S LAID BEFORE US HERE TODAY.
SO, UM, THAT'S, THAT'S MY 2 CENTS.
UH, THANK YOU FOR THE PRESENTATION AND UPDATE.
YOU KNOW, AFTER TODAY'S MEETING, STAFF AND I WILL CONTINUE OUR WORK WITH THE DPFP STAFF AND BOARD CHAIRMAN TO COME TO A PLAN THAT WE HOPE TO ALL AGREE WITH AND WE ARE GONNA MAKE SOME KIND OF AGREEMENT.
WE GONNA MAKE SURE THAT WE GONNA COME TO SOME TYPE OF CONCLUSION.
WITH THAT, THANK Y'ALL FOR COMING AND HOPING THAT YOU DID LEARN SOMETHING THAT WE ALL WORKING TOGETHER, WE ARE NOT WORKING SEPARATE.
SO WE ALL IN THIS BOAT TOGETHER.
UH, WITH THAT, IT IS NOW 4:42 PM ON APRIL 11TH, 2024.
THE A HO COMMITTEE, 4 42 4 42 EXECUTIVE SESSION.
YEAH, THE AD HOC COMMITTEE ON PENSION MEETING WILL NOW GO INTO CLOSE SESSION ON SECTION 5 5 1 0.07.
ONE OF TEXT OVER MEETING AT, ON THE FOLLOWING AMOUNT DESCRIBED ON TODAY.
AGENDA SEAT, THE INVITE OF THE STATE ATTORNEY REGARDING DALLAS POLICE, RETIRE OF OFFICIAL ASSOCIATION VERSUS DALLAS POLICE AND FIRE PENSION SYSTEM.
CASE NUMBER ZERO FIVE DASH 2 2 0 6 4 4 DASH CV.
THE AD HOC COMMITTEE ON PENSION MEETING HAD COMPLETED ITS CLOSED SESSION UNDER SECTION FIVE ONE POINT 0.07, ONE OF THE TEXAS OPEN MEETING ACT AT, UH, FIVE 14 APRIL 11TH, 2024.
[01:40:01]
RETURNED TO OPEN SESSION, NOW IT'S FIVE 14.WE ARE CLOSING AD HOC COMMITTEE ADJOURNED.