HomeMy WebLinkAboutLee Fink (Item No. 10) From: nore00@aran icusideas.corn
To: Yasuda.Erica;Woodward.Carrie;City Clerk; E-Comments
Subject: New eComment for Regular Meeting of the City Council
Date: Monday,February 1,2021 12:26:28 PM
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New eComment for Regular Meeting of the City
Council
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Meeting: Regular Meeting of the City Council
Item: 10. MID-YEAR REVIEW FOR FISCAL YEAR 2020-2021 This report provides the City
Council with a Mid-Year Budget Review of Fiscal Year 2020-2021, which projects General Fund
operating revenues to be $1.5 million higher than the adopted budget and General Fund
operating expenditures to be $1.8 million under budget; and projects General Fund Reserves of
$19 million at June 30, 2021 (or 27% of General Fund operating expenditures) which exceeds
the City Council's minimum reserve policy of 20%.
eComment: Dear Members of the City Council, I urge the Council to reconsider its policy of
making an early payment of more than $3 Million to Cal-PERS. As the former Deputy General
Counsel of the county-level equivalent of Cal-PERS (OCERS), I am familiar with the laws and
regulations regarding pension obligations. As the Council is aware, the City's unfunded liability to
Cal-PERS must be paid off over a 30-year period, and that is already part of the bill that Cal-
PERS regularly sends to the City. The Council has established a policy of paying off its
Unfunded Actuarial Accrued Liability early. To do that, it requires paying more than $3 million
annually for 15 years. That amounts to more than 4% of the City's annual General Fund. By
paying Cal-PERS $3 million per year that the City does not owe to Cal-PERS now, it deprives
the City of necessary funds that could be used to address the current public health pandemic,
provide current services to the people of Tustin, or to invest in capital projects, including
improvements improved parks or infrastructure in Old Town Tustin. Paying more than $3 Million
simply does nothing except put off these services to residents for the next 15 years. Playgrounds
that could be built with these funds have to wait until the children who would use them now are
grown up; business improvements that can be made would have to wait until many of the
businesses that need assistance have gone out of business. Many people meanwhile have
claimed that the City has a structural deficit, and yet there is a $3 million pot of annual funding
that can be used to fill that supposed hole. Finally, once the City pays the money to Cal-PERS,
the City will never get it back. If these funds are reserved, the City can always subsequently
decide to use them for unfunded pension obligations. Sincerely, Lee Fink
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