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M-90-0142
FEBRUARY 15, 1990 REASONS FOR RESTRUCTURING THE PENSION UNFUNDED LIABILITY PER THE GATES JUDGEMENT, FEi:-21-,;C' TIALI 14 *. 06 HISTORY OF GATES JUDGEMENT 2 HISTORICAL ANALYSIS OF CITY'S FINANCES 3 LONG TERM REVENUE AND EXPENSE OUTLOOK 5 REMOVE ESCALATING AND UNMANAGEABLE GATES JUDGEMENT LIABILITY A. GATES SCHEDULE 6 I B. GATES GRAPH —A 7 i IMPACT OF GATES ON SERVICE LEVELS 8 — IMPACT OF PENSION FUNDING ON FUTURE BUDGETS 9 SUMMARY OF ALTERNATIVES 10 -s ALTERNATIVES 1 — 6 11 — 19 ANALYSIS 1 — 5 AND 7 20 — 42 90-0141 90-OIL42 — 5 FE1c — 1 —9Cl 1'HU 14 :06 r 30 3 i'-2 4518 P. , f a ,S 'i I'm lgil III I LON REASONS FOR RESTRUCTURING -THE GATES JuD4:Et4ENT I. HISTORY OF GATES JUDGEMENT. (SEE CHART ON PAGE 2) II. TO OFFSET EXISTING AND FUTURE BUDGET CRISIS. III. MAINTAIN EXISTING SERVICE LEVELS AND QUALITY OF LIFE FOR THE RESIDENTS OF MIAMI. IV. MAINTAIN A FISCALLY SOUND CITY. V. MAINTAIN GOOD BOND RATINGS BY RESTORING THE CITY'S FUND BALANCE TO AN ACCEPTABLE LEVEL. VI. HISTORICAL ANALYSIS OF CITY'S FINANCES. (SEE PAGE 3-4) VII. STATE —IMPOSED 10 MILL LIMITATION. VIII. LONG TERM REVENUE AND EXPENSE OUTLOOK.(SEE PAGE 5) IX. REMOVE ESCALATING AND UNMANAGEABLE GATES JUDGEMENT LIABILITY. (SEE PAGES 6 AND 7) X. IMPACT OF GATES ON SERVICE LEVELS. (SEE PAGE 8) XI. IMPACT OF PENSION FUNDING ON FUTURE BUDGETS. (SEE PAGE 9) 1 1:E1:....,1-90 TNII 14:06 i - - 1 :o05 372 4518 P.02 0 all 111111111111111111110110 i A. USE OF DEDICATED PENSION MILLAGE FOR OTHER. MUNICIPAL PURPOSES. 1. YEAR BEGAN: 1939 2. AVERAGE ANNUAL MILLAGE RATE DEDICATED TO PENSION: 2.8 MILLS 3. DEDICATED PENSION FUNDS USED IMPROPERLY: $37 MILLION 4. DATE OF JUDGEMENT. MARCH 23, 1985. 5. CONDITIONS OF SETTLEMENT. a. RESTRUCTURING OF PENSION ADMINISTRATION . b. RE -COMPOSITION OF PENSION BOARDS. C. AMORTIZATION OF EXISTING UNFUNDED LIABILITY. -' d. AMORTIZATION OF FUTURE UNFUNDED LIABILITY. 6. AMOUNT OF UNFUNDED PENSION LIABILITY AS OF JUDGEMENT DATE. UNFUNDED PAXOFF ONG TERM_ COST LIABILITY AMOUNT AMOU-n OE GATES (MILLION) (MILLION) (MILLION) a. PLAN - $109 $276.0 $167.0 b. SYSTEM - 5104 285.2 181�2 TOTAL $213 15A" il!LG2 2 7305 -5 i 2 4�� 1 r� 90-0141 90-OJL42 P.0' HISTORICAL ANALYSIS OF CITY' S_11HAI3_� I. HISTORY OF FUND BALANCES: ACTUAL ACTUAL ACTUAL ACTUAL PROJECTED FY ' g5 Eft! 86 FY187 �- GENERAL FUND $12.5 $12.1 $10.2 $5.8 $6.0 �- G S A 10.4 7.4 0.0 0.0 0.0 SELF INSURANCE 5.0 3.8 3.3 3.2 2.0 PENSION TOTAL 529.3,E S13.5sQ$;_Q A. WHY FUND BALANCES CHANGED. • zL - LOSS OF FEDERAL REVENUE SHARING ($35 MILLION). - CANCELLATION OF STREET CLEANING FEE ($23 MILLION) . - NOT IMPOSING 10 MILL FOR OPERATING PURPOSES ($13 MILLION). - MAINTAINED $160 ANNUAL GARBAGE FEE, AND ABSORBED ADDITIONAL COST OF SOLID WASTE DEPARTMENT - MAINTAINED/IMPPROVED SERVICE LEVELS. - ADDITIONAL FUNDING FOR CRIME PROGRAM ($15 MILLION). - IMPROVED CITY'S FLEET ($10 MILLION). - PAID FOR UNEXPECTED EMERGENCIES SUCH AS CIVIL DISTURBANCES ($2 MILLION). -907-0142 3 TOl7=t- Fl 02, 1=E1;-:'1 +ft 1'1iU 14:0 6- 305 372 4518 P.02 _r t i - t, a IS FINANCES (CONT'D NUMBER OF EMPLOYEES REPORT TO CITY MANAGER REDUCED BY 18 FROM 39 TO 21. NUMBER OF DEPARTMENTS/OFFICES REDUCED BY 11 FROM 32 TO 21. SINCE FY 186 A NET OF 70 POSITIONS HAVE BEEN ELIMINATED, AN ANNUAL SAVINGS OF $3.5 MILLION. (INCLUDING FRINGES) GENERATED A NET SAVINGS OF $8.1 MILLION IN FY 186 THROUGH REORGANIZATION, COST SAVINGS AND REVENUE EFFORTS. GENERATED A NET SAVINGS OF $15.1 MILLION IN FY 187 THROUGH REORGANIZATION, COST SAVINGS AND REVENUE EFFORTS. CHANGE OF STREET LIGHT BULBS SAVING CITY $0.6 MILLION IN ANNUAL COST. (FOREVER) REFINANCING OF CONFERENCE CENTER SAVING $2.0 MILLION. -- NO COST OF LIVING INCREASE FOR ALL EMPLOYEES FOR FY 188. A 4% INCREASE WOULD HAVE COST $7.7 MILLION (INCLUDING FRINGES) OR A COST OF APPROXIMATELY $62.0 MILLION OVER 8 YEARS. BONUS VS. ANNIVERSARY INCREASE FOR GENERAL EMPLOYEES WILL SAVE APPROXIMATELY $2.8 MILLION OVER 8 YEARS. 25 PERCENT REDUCTION IN SALARIES FOR SECOND TIER NEW GENERAL - EMPLOYEES 4:ILL SAVE APPROXIMATELY $24.0 MILLION (INCLUDING FRINGES) OVER 8 YEARS. 4 90---0141L alV--0142- F ui t=1L_ P . Liz. F.02 POSITION YEAR REVENUES �t ENSES MORE FALL RM== 1991 $191.0 $205.0 ($14.0) 315 1992 $190.0 $202.0 ($12.0) 267 1993 $200.0 $201.5 ($ 1.5) 32 1994 $204.0 $211.0 ($ 7.0) 140 i 1995 $208.0 $215.8 ($ 7.8) 148 90--0142 5 5 372 4518 p. 02 t r� 11 GATES PAYMENT SCHEDULE FISCAL FIPO GESE TOTAL YEAR CONTRIBUTION CONTRIBUTION CONTRIBUTION 83-84 4.5 5.8 10.3 84-85 5.0 6.4 11.4 85-86 5.3 6.7 12.0 86-87 5,6 7.1 12.7 87-88 5.8 7.4 13.2 88-89 6.1 7.8 13.9 SUB -TOTAL - -- - 32.3 41.2 73,5 69-90 --_--- 6.4 8.2 14.6 90-91 6.8 8.6 15.4 91-92 7.1 9.0 16.1 92-93 7.5 9.5 17.0 93-94 7.9 9.9 17.8 94-95 8.3 10.4 18.7 95-96 8.7 11.0 19.7 96-97 9!1 11.5 20.6 97-98 9.6 12.1 21.7 . 96-99 10.1 12.7 22.8 99-00 10.6 13.3 23.9 00-01 11.1 14.0 25.1 01-02 11.6 14.7 26.3 02-03 12.2 15.3 27.5 03-04 12.8 16.2 29.0 04-05 13.5 17.0 30.5 05-06 14.1 17.9 32.0 06-07 14.8 18.8 33.6 07-08 15.6 4.7 20.3 08-09 16.4 0.0 16.4 09-10 17.2 0.0 17.2 10-11 18.0 0.0 18.0 11-12 3.5 0.0 3.5 ------------- ------------ ------------ TOTALS 285.2 276.0 561.2 - F E It r li Ll 1 4 05 37; 4518 90 OJL42 F. kt�? 1"ITS` OF MIAMl THE GATES ESCALATING AN UW,AANAGEABLE PAYMENT SCHEDULE V J �G 5 2C 15 10 5 Q 1984 1985 1992 199E 2000 2004 2403 2012 FISCAL YEAR 90--0141; 90-P0142 TUT:-'- 1-1.0-7, 1 V 8 1; -- ' 1- i 1 T H ,e r— 1 i Wir IMPACT OF GATES ON SERVICE EVELS --------------------------------- THE FUNDING OF UNFUNDED LIABILITY FROM THE GENERAL FUND HAS A SIGNIFICANT IMPACT ON THE CITY'S ABILITY TO MAINTAIN EMPLOYEES `. WHICH HAS A DIRECT IMPACT ON SERVICE LEVELS. FOR EXAMPLE,IN FY'91 UNFUNDED LIABILITY PAYMENT OF 015.4 MILLION WILL MAINTAIN APPROXIMATELY 357 POSITIONS OR 9% OF THE WORK FORCE AND WILL HAVE THE FOLLOWING IMPACT FOR THE NEXT 21 YEARS: GATES VALUE IN FISCAL PAYMENT TERMS OF YEAR SCHEDULE POSITIONS 90-91 $15.4 357 91-92 16.1 372 92-93 17.0 391 93-94 17.8 407 94-95 18.7 424 95-96 19.7 443 96-97 20.6 458 97-98 21.7 476 98-99 22.8 493 99-00 23.9 510 00-01 25.1 527 01-02 26.3 543 02-03 27.5 559 03-04 29.0 577 04-05 30.5 595 05-06 32.0 611 06-07 33.6 628 07-08 20.3 494 08-09 16.4 456 09-10 17.2 464 10-11 18.0 471 11-12 3.5 350 TOTALS 473.1 8 .9"141 90-0142 1= C 1:.. . 1 _+ ►: t T H f_f 1 4: C-1 + 305 77 4 1 F. 02 IMPACT `r IMPACT OF PENSION FUNDING ON FUTURE BUDGETS ------------------------------------------- �i FISCAL YEAR 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 F i TOTAL PROJECTED SHORT FALL ------------- -13,612,562 -12,115,731 -1,503,729 -7,002,739 -7,743,349 -9,921,010 -11,159,138 -12,587,723 -14,239,233 -16,154,693 -106,039,907 ------------ LESS:UNFUNDED PENSION LIABILITY ------------ 15,400,000 16,100,000 17,000,000 17,800,000 18,700,000 19,700,000 20,600,000 21,700,000 22,800,000 23,900,000 193,700,000 ------------- ADJUSTED (SHORT FALL) SAVINGS 1,767,438 3,984,269 15,496,271 10,797,261 10,956,651 9,778,990 9,440,862 9,112,277 6,560,767 7,745,307 87,660,093 9 90 -0142 1.01.- { . o: . .05 372 4518 P.C12 1. BOND ENTIRE GATES JUDGEMENT a. SAVINGS TO GENERAL FUND IF GATES JUDGEMENT IS ENTIRELY BONDED. (SEE PAGE 11) b. COST TO DEBT SERVICE IF ENTIRE AMOUNT IS BONDED. (SEE PAGE 12 ) 2. BOND 1/2 UTILIZING APPROPRIATION BONDS AND 1/2 UTILIZING GENERAL OBLIGATION BONDS. (SEE PAGE 13) 3. ISSUE APPROPRIATION BONDS FOR $14,600,000 ANNUALLY AND BOND DIFFERENCE. (SEE PAGES 14 AND 15) 4. APPROPRIATE $14,6001000 ANNUALLY (NO BONDS), AND BOND DIFFERENCE. (SEE PAGE 16) 5. ASK UNIONS TO AGREE LEVEL PAYMENTS AT $14,600,000. (SEE PAGE 17) 6. ISSUE $136,000,000 BOND FOR UNFUNDED LIABILITY TO SATISFY GATES JUDGEMENT. (SEE PAGES 18 AND 19) 7. ISSUE $126,000,000 SPECIAL OBLIGATION BONDS OVER A THREE YEAR PERIOD IN $42 MILLION INCREMENTS. (SEE PAGES 33 AND 34) 8. ISSUE $125,000,000 SPECIAL OBLIGATION BONDS OVER A FIVE YEAR PERIOD IN $25 MILLION INCREMENTS. (SEE PAGES 36 - 38) 10 90-OJL42 J t=E}; - 1 -:'�:� TN 11 14 .t�� '►jam ?� 4518 P.02 PENSION21 ..W ALTERNATIVE I FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 200'9 2010 2011 2012 TOTAL SAVINGS TO GENERAL FUND IF GATES PAYMENTS ARE MOVED TO DEBT SERVICE FUND --------------------------------------- TOTAL PENSION COST PER GATES INCLUDING NORMAL COST ------------- $17,892,000 19,501,000 21,287,000 23,054,000 25,007,000 27,153,000 29,884,000 33,315,000 33,191,000 35,719,000 38,468,000 41,346,000 44,360,000 47,619,000 51,030,000 54,704,000 58,549,000 47,575,000 46,194,000 49,715,000 53,452,000 57,416,000 $856,431,000 ------------ 11 NEW PENSION COST IF $226 MILLION BOND ISSUED FOR UNFUND.LIAB. ------------- $6,893,000 7,626,000 8,396,000 9,204,000 10,052,000 10,943,000 11,878,000 12,861,000 13,892,000 14,975,000 16,112,000 17,305,000 18,559,000 19,875,000 21,257,000 22,708,000 24,232,000 25,832,000 27,512,000 29,275,000 31,127,000 33,072,000 $393,586,000 ------------ 7�05 SAVINGS TO GENERAL FUND ------------ 010,999,000 11,875,000 12,691,000 13,850,000 14,955,000 16,210,000 18, 006•, 000 20,454,000 19,299,000 20,744,000 22,356,000 24,041,000 25,801,000 27,744,000 29,773,000 31,996,000 34,317,000 21,743,000 .18,682,000 20,440,000 22,325,000 24,344,000 $462,845,000 ------------- J 1 4 451.J 90-0141 9Om-0142 P.02 ALTERNATIVE 1-A ISSUE G.O. BOND OF $226 MILLION (WITH NO MILI,AGE RATE INCREASE) TO BE REPAID FROM THE '- DEBT SERVICE FUND. (22 YEAR AMORTIZATION) -z - �" G.O. DEBT BONDS TOTAL COST $ 226,000,000 $572,849,773 SCHEDULE FISCAL PROPOSED DEBT YEAR SERVICE CAB'S 90-91 $0 91-92 19,460,000 92-93 19, 460, 000 93-94 19,460,000 94-95 19,460,000 95-96 20,155,000 96-97 20,795,000 97-98 22,355,000 98-99 23,870,000 99-00 25,235,000 00-02. 25,375,000 01-02 25,980,000 02-03 26,205,000 03-04 28,712,087 04-05 29,803,658 05-06 32,140,452 06-07 34,019,855 07-08 35,347,184 08-09 35,574,700 09-10 35,649,330 10-11 36,498,067 11-12 .37,294,440 ------------ TOTALS $572,849,773 ------------ 12 =i F" E 1: 1 - _+ii T NU 1 4 : 0E. i ,05 3( _ 451 90-O L41 90..O142 P . C+ 2 ALTERNATIVE 2. ALT2 x.JND 50% OF THE UNFUNDED U IuIZING APPROPRIATION BONDS AND 50% UTILIZING G.O. DEBT BONDS. DEBT SCHEDULE ------------- PROPOSED DEBT PROPOSED DEBT FISCAL SERVICE ANNUAL SERVICE YEAR APPROPRIATION G.O. BONDS 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 $5,910,060 11,820,000 11,820,000 11,820,000 11,810,000 11,810,000 11,810,000 11,815,000 11,810,000 11,810,000 11,810,000 11,810,000 11,810,000 11,814,351 11,816,757 11,816,316 11,816,877 11,814,723 11,813,629 11,813,762 11,815,666 11,812,330 0 0 1,320,000 2,650,000 5,860,000 7,060,000 8,080,000 10,440,000 12,640,000 14,700,000 14,845,000 15,730,000 16,170,000 18,375,705 21,458,924 24,697,066 27,341,967 29,395,835 29,689,884 29,841,555 31,017,328 32,190,544 TOTAL GROSS DEBT SERVICE ------------ $5,910,000 11,820,000 13,140,000 14,470,000 17,690,000 18,870,000 19,890,000 22,255,000 24,450,000 26,510,000 26,655,000 27,540,000 27,980,000 30,190,056 33,275,681 36.,513,384 39,158,844 41,210,558 41,503,513 41,655,317 42,832,994 44,002,874 TOTALS 0253,999,411 $353,523,810 $607,523,221 13 =. F E r;.. 1 .. _�t� Ttil_I 1 4 90-1-0141 90-0142 F.O2 f IL ALTERNATIVE 3. WHAT WOULD BE THE COST OF AN ANNUAL APPROPRIATION BOND OF $14.6 MILLION (WHICH IS THE AMOUNT THE CITY APPROPRIATES NOW FOR UNFUNDED PENSION) WITH THE BALANCE BONDED FROM DEBT SERVICE(ON A 22 YEAR AMORTIZATION)? ISSUE APPROPRIATION BOND OF $161..3 MILLION WHICH IS TO BE REPAID FROM AN ANNUAL BUDGET APPROPRIATION OF $14.6 MILLION WITH THE BALANCE OF $94 MILLION BONDED FROM DEBT SERVICE (22 YEAR AMORTIZATION) APPROPRIATION BOND G.O. DEBT BOND ------------------ -------------- $ 161,300,000 $ 93,994,471 FISCAL PROPOSED DEBT PROPOSED DEBT YEAR ANNUAL APPROP.SERVICE CAB'S -------------------------------------- 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 TOTALS ALT3 $14,599,134 1.4, 597, 596 14,595,854 14, 595, 654 14,597,199 14,598,779 14,598,624 14,594,903 14,595,729 14,598,489 14,595,483 14,599,264 14,596,268 14,598,519 14,594,919 14,596,775 14,595,881 14,599,388 14,598,731 14,595,706 14,596,750 14,596,725 $0 81190,000 8,190,000 8,190,000 8,195,000 8,195,000 81195,000 8,195,000 8,195,000 8,195,000 8*195,000 8,195,000 8,195,000 8,193,184 8, 2.941891 9,613,000 11,496,164 12,819,150 13,050,908 13,117,132 13,969,535 14,769,972 TOTAL COST ------------- $ 524,685,306 TOTAL $14,599,134 22,787,596 22,785,854 22,785,654 22,792,199 22,793,779 22,793,624 22,789,903 22,790,729 22:793,489 22,790,483 22,794,264 22,791,268 22,791,703 22,789,810 24,209,775 26,092,045 27,418,538 27,649,639 27,712,838 280566,285 29,366,697 ------------------------------------- $321,136,370 $203,548,936 $524,685,306 ------------------------------------- li u 1 4: 0 6 14 = l75 3 i 2 45 1 - 90-0141 90-0142 TUT: iL. P. 02, P . 02 PENSION30 ALTERNATIVE 3A: SAVINGS TO GENERAL FUND IF GATES PAYMENTS ARE REPAID FROM AN ANNUAL APPROPRIATION OF $14.6 MILLION WITH THE BALANCE BONDED FROM THE DEBT SERVICE --------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 199E 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 GATES COST $15,400,000 16,100,000 17,000,000 17,800,000 18,700,000 19,700,000 20,600,000 21,700,000 22,800,000 23,900,000 25,100,000 26,300,000 27,500,000 29,000,000 30,500,000 32,000,000 33,600,000 20,300,000 16,400,000 17,200,000 18,000,000 3,500,000 $473,100,000 -------------- 15, PROPOSED DEBT ANNUAL APPROP. ------------- $14,599,134 14,597,596 14,595,854 14,595,654 14,597,199 14*598,779 14,598,624 14,594,903 14,595,729 14,598,489 14,595,483 14,599,264 14,596,268 14,598,519 14,594,919 14,596,775 14,595,881 14,599,388 14,598,731 14,595,706 14,596,750 14,596,725 $321,136,370 ------------ SAVINGS TO GENERAL FUND ------------- $800,866 1,502,404 2,404,146 3,204,346 4,102,801 5,101,221 6,001,376 7,105,097 8,204,271 9,301,511 10,504,517 11,700,736 12,903,732 14,401,461 15,905,081 17,403,225 19,004,119 5,700,612 1,801,269 2,604,294 3,403,250 -11,096,725 $151,963,630 ------------ 0 5 _ 1 2 4 5 1 S' so-01 1 90-0142 u 0 s i PENSION28—J ALTERNATIVE 3B:TOTAL COST TO CITY IF A $14.6 MILLION APPROPRIATION BOND AND $93.9 MILLION G.O. BOND IS ---------------------------------------------- ISSUED TO SATISFY THE GATES JUDGEMENT NEW TOTAL COST TOTAL PENSION OF PENSION PLUS ADDITIONAL COST PER GATES DEBT SERVICE COST/(SAVINGS) FISCAL INCLUDING FOR $136 MILLION TO GENERAL YEAR NORMAL COST BOND ISSUE FUND ------ 1991 ------------ $17,892,000 ------------- $21,492,134 ------------- $3,600,134 1992 19,501,000 30,413,596 10,912,596 1993 21,287,000 31,181,854 9,894,854 1994 23,054,000 31,989,654 8,935,654 1995 25,007,000 32,844,199 7,837,199 1996 27,153,000 33,736,779 6,583,779 1997 29,884,000 34,671,624 4,767,624 1998 33,315,000 35,650,903 2,335,903 1999 33,191,000 36,682,729 3,491,729 2000 35,719,000 37,768,489 2,049,489 2001 38,468,000 38,902,483 434,483 2002 41,346,000 40,099,264 —1,246,736 2003 44,360,000 41,350,268 —3,009,732 2004 47,619,000 42,666,703 —4,952,297 2005 51,030,000 44,046,810 —6,983,190 2006 54,704,000 46,917,775 —7,786,225 2007 58,549,000 50,324,045 '-8,224,955 2008 47,575,000 53,250,538 5,675,538 2009 46,194,000 55,161,639 8,967,639 2010 49,715,000 56,987,838 7,272,838 2011 53,452,000 59,693,285 6,241,285 2012 57,416,000 --------------- 62,438,697 5,022,697 TOTAL $856,431,000 --------------- --------------- $918,271,306 --------------- ------------- $61,840,306 ------------- 15A 1'E 1; 1 4: 0 6 ? Cl 5 3 1 4 5 1 90-0141 90-0142 Ti- P.02 ,c; El ALTERNATIVE 4. WHAT WOULD BE THE COST IF THE CITY CONTINUES TO APPROPRIATE $14.6 MILLION IN THE ANNUAL BUDGET (WITHOUT BONDS WHICH IS THE AMOUNT THE CITY APPROPRIATES NOW FOR UNFUNDED PENSION) WITH THE BALANCE BONDED FROM DE$T SERVICE (22 YEAR AMORTIZATION)? ISSUE $94 MILLION G.O. BOND (WITH NO INCREASE IN MILLAGE RATE TO BE REPAID FROM THE DEBT SERVICE FUND (22 YEAR AMORTIZATION FISCAL YEAR 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 TOTALS A G.O. DEBT BONDS ---------------- $ 93,994,471 PROPOSED DEBT SERVICE CAB'S ------------ $0 81190,000 81190,000 81190,000 81195,000 8,195,000 81195,000 8,195,000 81195,000 8,195,000 8,195,000 8,195,000 8,195,000 8,193,184 8,194,891 9,613,000 11,496,164 12,819,150 13,050,908 13,117,132 13,969,535 14,769,972 $203,548,936 ------------ TOTAL COST OF BONDS ------------------- $ 203,548,936 ANNUAL GENERAL FUND APPROPRIATION ------------ $14,599,134 14,597,596 14,595,854 14,595,654 14,597,199 14,598,779 14,598,624 14,594,903 14,595,729 14,598,489 14,595,483 14,599,264 14,596,268 14,598,519 14,594,919 14,596,775 14,595,881 14,599,388 14,598,731 14,595,706 14,596,750 14,596,725 $321,136,370 ------------ 16 TOTAL COST ------------ $14,599,134 22,787,596 22,785,854 22,785,654 22,792,199 22,793,779 22,793,624 22,789,903 22,790,729 22,793,489 22,790,483 22,794,264 22,791,268 22,791,703 22,789,810 24,209,775 26,092,045 27,418,538 27,649,639 27,712,838 28,566,285 29,366,697 $524,685,306 ------------ 90-0141 90- 0142 n tilJj LA%114:t L 11,31% U:'l 1. vl'1 1 ! Aultu "*' - u ' i "' "' .l.a 1. ,'.., �.j.. , . ,,, 1 � $14.6 MILLION APPROPRIi UN UNTIL THE DEBT i3 COMPLETELY PAID OFF. IF THE UNION AGREED TO PERMIT THE CITY TO PAX OFF THE UNFUNDED LIABILITY AT AN ANNUAL RATE OF $14.6 MILLION PER YEAR, THE LENGTH OF THE AMORTIZATION PERIOD WOULD BE EXTENDED FOR AN ADDITIONAL 10 YEARS FROM THE INITIAL 29 YEARS FOR A TOTAL AMORTIZATION PERIOD OF 39 YEARS. THE EXTENSION OF THE AMORTIZATION PERIOD BY 10 YEARS WOULD VIOLATE STATE LAW WHICH LIMITS THE AMORTIZATION PERIOD FOR UNFUNDED LIABILITY PAYMENTS TO 30 YEARS. IF THE COMMISSION WANTED TO ADOPT AN ALTERNATIVE THAT WOULD PROVIDE LEVEL PAYMENTS(DEBT) WITHOUT VIOLATING THE 30 YEAR STATE -IMPOSED LIMIT ON AMORTIZATION, THE MINIMUM IT COULD CONTRIBUTE WOULD BE APPROXIMATELY $21.5 MILLION, WHICH IS MORE THAN THE CITY IS CURRENTLY APPROPRIATING. FISCAL YEAR ------------ 83-89 89-90 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 96-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 FIPO CONTRIBUTION ------------ 32.3 6.4 6.8 7.1 7.5 7.9 8.3 8.7 9.1 9.6 10.1 10.6 11.1 11.6 12.2 12.8 13.5 14.1 14.8 15.6 16.4 17.2 18.0 3.5 ----------------STATE 13-14 14-IS 15-16 17-18 18-19 19-20 20-21 21-22 22-23 26-24 04i+,1 1. GESE CONTRIBUTION ------------ 41.2 8.2 8.6 9.0 9.5 9.9 10.4 11.0 11.5 12.1 12.7 13.3 14.0 14.7 15.3 16.2 17.0 17.9 18.8 4.7 0.0 0.0 0.0 0.0 LAW LIMIT FOR ------------ TOTALS 285.2 ------------ ALT5 TOTAL CONTRIBUTION ------------ 73.5 14.6 15.4 16.1 17.0 17.8 18.7 19.7 20.6 21.7 22.8 23.9 25.1 26.3 27.5 29.0 30.5 32.0 33.6 20.3 16.4 17.2 18.0 3.5 PROPOSED LEVEL PAYMENTS -------------- 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6 AMORTIZATION ---------------- 14.6 14.6 14.6 14.6 14.6 14.6 14 6 ------------ 276.0 ------------ 17 14.6 90--0141: 14.6 ------------ 90-0142 ------5-9 561.2 473.1 ( ~ • lip F:F 1;1-1 14 :0 '_. CJ '7 451 8 P. leek ALTERNATIVE 6. ISSUE G.O. BONDS FOR $136 MILLION (TAX—EXEMPT) TO SATISFY GATES JUDGEMENT(22 YEAR AMORTIZATION) G.O. DEBT BONDS TOTAL COST _—w__— ---- ww—__—__—_-- $ 136,000,000 $ 306,348,632 DEBT SCHEDULE ------------- FISCAL PROPOSED DEBT YEAR SERVICE CAB'S ------------------- 90-91 $7,120,000 91-92 14,245,000 92-93 14,250,000 93-94 14,250,000 94-95 14,250,000 95-96 141250,000 96-97 14,250,000 97-98 14,250,000 98-99 14,250,000 99-00 14,250,000 00-01 14,250,000 01-02 14,250,000 02-03 14,250,000 03-04 14,247,486 04-05 14,247,139 05-06 14,249,275 06-07 141247,870 07-08 14,247,660 08-09 14,249,737 09-10 141250,272 10-11 14e245,648 11-12 14,248,545 .r_wwowow�.00_ TOTALS $306,3481632 is S05 Z7 ' 4518 90.0141 90-1142 ?'ll1 i tL_ P . Lt= F ALTERNATIVE 6A. TSSUE G.O. BONDS FOR $136 MILLION (TAXABLE) TO SATISFY GATES JUDGEMENT(22 YEAR AMORTIZATION) G.O. DEBT BONDS TOTAL COST $ 136,000,000 $ 396,416,952 DEBT ------------- SCHEDULE FISCAL PROPOSED DEBT YEAR SERVICE CAB'S 90-91 $9,215,000 91-92 18,440,000 92-93 18,440,000 93-94 18, 440, 000 .94-95 18,440,000 95-96 18,440tOOO 96-97 18,438,017 97-98 '18,437,683 98-99 18,438,375 99-00 18,437,650 00-01 18,438,266 01-02 18,438,155 02-03 18,436,935 03-04 18,438,438 04-05 18,438,726 05-06 18,438,101 06-07 18,435,399 07-08 18,436,455 08-09 18,437,044 09-10 18,436,559 10-11 18,437,111 11-12 18,439,038 TOTALS ------------ $396,416,952 0V", 4 fit:-,� _�tj IHlI 14:06 X i - r05 372 4518 9"i4l 90-0142 9 PENSION22 ANALYSIS 1, COMPARISON BETWEEN GATES UNFUNDED PAYMENTS AND $226 MILLION BOND WITH NO MILLAGE INCREASE ------------------------------------------- FISCAL YEAR 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 TOTAL GATES COST $15,400,000 16,100,000 17,000,000 17,800,000 18,700,000 19,700,000 20,600,000 21,700,000 22,800,000 23,900,OOQ 25,100,000 26,300,000 27,500,000 29,000,000 30,500,000 320000,000 33,600,000 20,300,000 16,400,000 17,200,000 18,0000000 3,500,000 $473,100,000 ------------ 20 $226 MILLION BOND COST $O 19,460,000 19,460,000 19,460,000 19,460,000 20,155,000 20,795,000 22,355,000 23,870,000 25,235,000 25,375,000 25,980,000 26,205,000 28,712,087 29,803,658 32,140,452 34,019,855 35,347,184 35,574,700 35,649,330 36,498,067 37,294,440 $572,849,773 ------------ ADDITIONAL COST (SAVINGS) ------------- -15,400,000 3,360,000 2,460,000 1,660,000 760,000 455,000 195,000 655,000 lt07O,000 1,335,000 275,000 -320,000 -1,295,000 -287,913 -696,342 140,452 419,855 15,047,184 19,174,700 18,449,330 18,498,067 33,794,440 $99,749,773 90-0141. =i F E j;- :' j - :l0 THLI 14 06 05 372 4518 P.02 ao PENSION22—A ANALYSIS 1—A: COMPARISON BETWEEN GATES UNFUNDED PAYMENTS AND $226 MILLION BOND WITH LEVEL DEBT SERVICE ----------------------------------------- FISCAL YEAR 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 96-99 99-00 00-01 01-02 02-03 03-04 04-05 OS-06 06-07 07-08 08-09 09-10 10-11 11-12 ife—ILW -j F E 1:...2 1 ... •_pis TNL► 14 :06 GATES COST $15,400,000 16,100,000 17,000,000 17,800,000 10,700,000 19,700,000 20,600,000 21,700,000 22,800,000 23,900,000 25,100,000 26,300,000 27,500,000 29,000,000 30,500,000 32,000,000 33,600,000 20,300,000 16,400,000 17,200,000 18,000,000 3,500,000 $473,100,000 ------------ $226 MILLION BOND COST ------------- $23,003,774 23,006,374 23,004,734 23,003,934 23,004,384 23,003,484 23,003,543 23,006,454 23,003,714 23,001,974 23,002,148 23,004,669 23,004,469 23,006,319 23,006,025 23,003,031 23,003,062 23,006,131 23,001,894 23,005,362 23,005,125 23,005,125 $506,095,739 ------------ ADDITIONAL COST (SAVINGS) ------------- $7,603,774 6,906,374 6,004,734 5,203,934 4,304,384 3,303,484 2,403,543 1,306,464 203,714 —898,026 —2,097,852 —3,295,331 —4,495,531 —5,993,681 —7,493,975 —8,996,969 —10,596,938 2,706,131 6,601,894 5,805,362 5,005,125 19,505,125 $32,995,739 9 D141 21 90-OJL42 P.02 I PENSION22—B ANALYSIS 1—B: COMPARISON BBMEN A $226 MILLION BOND ISSUE WITH NO MILLAGE INCREASE AND LEVEL DEBT SERVICE ------------------------------------------ FISCAL YEAR 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 TOTAL $226 MILLION BOND COST WITH NO 14ILLAGE INCREASE $0 29,460,000 19,460,000 19,460,000 19,460,000 20,155,000 20,795,000 22,355,000 23,870,000 25,235,000 25,375,000 25,980,000 26,205,000 28,712,087 29,803,658 32,140,452 34,019,855 35,347,184 35,574,700 35,649,330 36,498,067 37,294,440 $572,849,773 ------------ 22 $226 MILLION BOND COST WITH LEVEL DEBT SERVICE ------------- $23,003,774 23,006,374 23,004,734 23,003,934 23,004,384 23,003,484 23,003,543 23,006,464 23,003,714 23,001,974 23,002,148 23,004,669 23,004,469 23,006,319 23,006,025 23,003,031 23,003,062 23,006,131 23,001,894 23,005,362 23,005,125 23,005,125 $506,095,739 ------------ ADDITIONAL COST (SAVINGS) ------------- $23,003,774 3,546,374 3,544,734 3,543,934 3,544,364 2,848,484 2,208,543 651,464 —866,286 —2,233,026 —2,372,852 —2,975,331 —3,200,531 —5,705,768 —6,797,633 —9,137,421 —11,016,793 .-12,341,053 —12,572,806 —12,643,968 —13,492,942 —14,289,315 ($66,754,034) ------------- 90-0141 90 -OJL42 f E is I — :rid 1 11u 1 4 : 0 tll 05 ??451 8 G. 0 PENSION21-A ANALYSIS 2: SAVINGS TO GENERAL FUND IF GATES PAYMENTS ARE MOVED TO DEBT SERVICE FUND --------------------------------------- `-- NEW PENSION .� FISCAL TOTAL PENSION COST IF $226 SAVINGS = YEAR COST PER GATES MILLION BOND TO GENERAL INCLUDING ISSUED FOR FUND _i _I NORMAL COST UNFUND.LIAB. 1991 - $17,892,000 $6,893,000 $10,999,000 -j 1992 19,501,000 7,626,000 11,075,000 1993 21,267,000 8,396,000 12,891,000 - 1994 23,054,000 9,204,000 13,850,OQ0 1995 25,007,000 10,052,000 14,955,000 -� 1996 27,153,000 10,943,000 16,210,000 1997 29,884,000 11,878,000 18,006.,000 -I 1998 33,315,000 12,861,000 20,454,000 1999 33,191,000 13,892,000 19,299,000 2000 35,719,000 14,975,000 20,744,000 2001 38,468,000 16,112,000 22,356,000 2002 41,346,000 17,305,000 24,041,000 'I 2003 44,360,000 16,559,000 25,801,000 I 2004 47,619,000 19,875,000 27,744,000 2005 51,030,000 21,257,000 29,773,000 ' 2006 54,704,000 22,708,000 31,996,000 2007 58,549,000 24,232,000 34,317,000 2008 47,575,000 25,832,000 21,743,000 2009 46,194,000 27,512,000 l 8,682,000 j 2010 49,715,000 29,275,000 20,440,000 `i 2011 53,452,000 31,127,000 22,325,000 2012 57,416,000 33,072,000 24,344,000 TOTAL $856,431,000 $393,586,000 $462,845,000 =j -- 7 ------------•---- ------------- ------------- f= E 1. - 2 1 '71 i 1 7 Ei 11 1 4: h 6 90-014 23 90-0:142 -t.05 7 1 2' 4518 P.02 PENSION23 = _ ANALYSIS 2A: TOTAL COST TO CITY IF GATES 14YMENTS ARE MOVED TO DEBT SERVICE i. (WITH NO MILLAGE RATE INCREASE) NEW TOTAL COST _ - TOTAL PENSION OF PENSION PLUS COST PER GATES DEBT SERVICE FISCAL INCLUDING FOR $226 MILLION ADDITIONAL COST - - YEAR NORMAL COST BOND ISSUE (SAVINGS) 1991 $17,892,000 $6,893,000 —10,999,000 - 1992 19,501,000 27,0860000 71585,000 1993 21,287,000 27,856,000 6,569,000 - = 1994 23,054,000 28,664,000 5,610,000 1995 25,007,000 29,512,000 4,505,000 - 1996 27,153,000 31,098,000 3,945,000 1997 29,884,000 32,673,000 21789,000 ' 1998 33,315,000 35,216,000 11901,000 _.( 1999 33,191,000 37,762,000 41571,000 2000 35,719,000 40,210,000 4,491,000 -j 2001 38,468,000 41,487,000 3,019,000 2002 411346,000 43,285,000 11939,000 - '( 2003 44,360,000 44,764,000 404,000 2004 47,619,000 48,587,087 968,087 2005 519030,000 51,060,658 30,658 _ =` 2006 54,704,000 541848,452 144,452 - 2007 58,549,000 58,251,855 -297,145 2008 47,575,000 61,179,184 13,604,184 2009 46,194,000 631086,700 16e842,700 2010 49,715,000 64,924,330 15,209,330 2011 53,452,000 67,625,067 14,173,067 2012 57,416,000 70t366,440 12,950,440 TOTAL $856,431,000 $966,435,773 $110,004,773 i - it fNIJ 14 :0r 24 05 112 -35 1 90� L41. 90-0142 T IJ'i ;�L. N . 02 %.02 Amb. Aft PERSION25 ANALYSIS 2B: TOTAL CAST TO CITY IF GATES PAYMENTS ARE MOVED TO DEBT SERVICE (WITH LEVEL DEBT PAYMENTS) -----.----------------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008' 2009 2010 2011 2012 K•�i' -jv-", TOTAL PENSION COST PER GATES INCLUDING NORMAL COST. ---------------- $17,892,000 19,501,000 21,287,000 23,054,000 25,007,000 27,153,000 29,684,000 33,315,000 33,191,000 35,719,000 36,468,000 41,346,000 44,360,000 47,619,000 51,030,000 54,704,000 58,549,000 47,575,000 46,194,000 49,715,000 53,452,000 57,416,000 $856,431,000 ------------ NEW TOTAL COST OF PENSION PLUS DEBT SERVICE FOR $226 MILLION BOND ISSUE ---------------- 029,896,774 30,632,374 31,400,734 32,207,934 33,056,384 33,946,484 34,881,543 35,867,464 36,895,714 37,976,974 39,114,148 40,309,669 41,563,469 42,881,319 44,263,025 45,711,031 47,235,062 48,838,131 50,513,894 52,280,362 54,132,125 56,077,125 $899,681,739 ------------ ADDITIONAL COST (SAVINGS) ---------------- $12,004,774 11,131,374 10,113,734 = 9,153,934 _ 8,049,384 6,793,484 4,997,543 2,552,464 3,704,714 2,257,974 646,140 -1,036,331 2,796,531 -4,737,681 -6,766,975 -8,992,969 -11,313,938 1,263,131 4A'319,894 2,565,362 680,125 -1,338,875 $43,250,739 90-0141 90-0142 25 TNI_� 14 :0i.) =05 372" 4518 F. E12 PENSION23-B ANALYSIS 2C: COMPARISON BETWEEN TIME TOTAL COST OF PENSION WITH NO MILLAGE INCREASE AND LEVEL DEBT SERVICE FOR $226 MILLION BOND ISSUE. �-- (COMPARISON BETWEEN ANALYSIS 2A AND 2B) NEW TOTAL COST NEW TOTAL COST OF PENSION PLUS OF PENSION PLUS DEBT SERVICE DEBT SERVICE FISCAL FOR $226 MILLION FOR $226 MILLION YEAR BOND ISSUE BOND ISSUE DIFFERENCE 1991 $6,893,000 $29,896,174 $23,003,774 1992 27,086,000 30,632,374 3,546,374 1993 27,856,000 31,400,734 3,544,734 1994 28,664,000 32,207,934 3,543,934 1995 29,512,000 33,056,384 3,544,384 1996 31,098,000 33,946,484 2,848,484 1997 32,673,000 34,881,543 2,208,543 1998 35,216,000 35,867,464 651,464 1999 37,762,000 36,895,714 -866,286 2000 40,210,000 37,976,974 -2,233,026 2001 41,487,000 39,114,148 -2,372,852 2002 43,285,000 40,309,669 -2,975,331 2003 44,764,000 41,563,469 -3,200,531 2004 48,587:087 42,881,319 -5,705,768 2005 51,060,658 44,263,025 -6,797,633 2006 54,848,452 45,711,031 -9,137,421 2007 58,251,855 47,235,062 -11.,016,793 2008 61,179,184 48,838,131 -12,341,053 2009 63,086,700 50,513,894 -12,572,806 2010 64,924,330 52,260,362 -12,643,968 2011 67,625,067 54,132,125 -13,492,942 2012 70,366,440 56,077,125 -14,289,315 TOTAL $966,435,773 - $899,661,739 ($66,754,034) 26 I- f I. T H 1_1 14 : k1 r, =05 37� 4510 9®-Oi42 PENSION28-8 ANALYSIS 3: SAVINGS TO GENERAL FUND IF A $136 MILLION GENERAL OBLIGATION BOND IS ISSUED TO SAT:ISF'Y THE GATES UNFUNDED JUDGEMENT (TAX-EXEMPT) ---------------------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TOTAL TOTAL PENSION COST PER GATES INCLUDING NORMAL COST ------------ $17,892,000 19,501,000 21,287,000 23,054,000 25,007,000 27,153,000 29,884,000 33,315,000 33,191,000 35,71Q,000 38,468,000 41,3460000 44,360,000 47,619,000 51,030,000 54,704,000 58,549,000 47,575,000 46,194,000 49,715,000 53,452,000 57,4160000 $856,431,000' ------------- 27 NEW PENSION COST IF $136 MILLION BOND ISSUED FOR UNFUND. LIAB. ------------- $14,6580000 15,390,000 16,160,000 16,968,000 17,816,000 18,707,000 19,643,000 20,625,000 21,6566000 22,739,000 23,876,000 250070,000 26,323,000 27,639,000 29,021,000 30,472,000 31,996,000 33,5960000 35,276,000 37,040,000 38,892,000 40,836,000 $564,399,000 ------------ SAVINGS TO GENERAL FUND ------------- $3,234,000 4,111,000 5,127,000 6,086,000 7,191,000 8,446,000 10,241,000 12,690,000 11,535,000 1209800000 14,592,000 16,276,000 18,037,000 190980,000 22r009,000 24,232,000 26,553,000 13,979,000 10,918,000 12,675,000 14,560,000 16,580,000 $292,032,000 ------------ 90--0 141 so_142 iJT.-f . P.0� FE1; 11Ll 14 .Ci 6 3fiS 7 s 451 P.02 4. TY OF H J F1`.1 J ; 1. ; z ,_n Sri r r,- a: PENSION28-A ANALYSIS 3A: COMPARISON BETWEEN GATES UNFUNDED PAYMENTS AND $136 MILLION GENERAL OBLIGATION BOND TO SATISFY THE GATES JUDGEMENT (TAX -EXEMPT) ----------------------------------------------►- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007, 2008 2009 2010 2011 2012 TOTAL ram. { FEI: GATES COST 15,400,000 16,100,000 17,000,000 17,800,000 18,700,000 191700,000 20,600,000 21,700,000 22,800,000 23,900,000 25,100,000 26,300,000 27,5000000 29,000,000 30, 500, 000 32,000,000 33,600,000 20,300,000 16,400,000 17 , 200, 000 18,000,000 3,500,000 473,100,000 -------------- 28 $136 MILLION BOND COST 7,120,000 14,245,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 141250,000 14,250,©00 14,250,000 14,247,486 14,247,139 14,249,275 14,247,870 14,247,660 14,249,737 14,250,272 14,245,648 14,248,545 306,348,632 -------------- ADDITIONAL COST (SAVINGS) ------------- -81280,000 -1,8550000 -2,750,000 -3,550,000 -4,450,000 -5,450,000 -6,350,000 -7,450,000 -8,550,000 -9,650,000 -10,850,000 -12,0501000 -13,250,000 -141752,514 -16,252,86l -17,750,725 -19,3521130 -6,052,340 -2,150,263 -2,949,728 -3,754,352 10,748,545 -1660751,368 ------------ go- 0_.41 90"01,42 r t= i -: ' .I t F F='i it1 i'i' OF t1 I E"1' 11 t'ti �l ; j i-+ _tD I T:a TO{�¢''� CITY Y CL FF� P.t+? PENSION28 ANALYSIS 3B: TOTAL COST TO CITY IF A $136 MILLION GENERAL OBLIGATION BOND IS ISSUED TO SATISFY THE GATES JUDGEMENT (WITH TAX—EXEMPT LEVEL DEBT PAYMENTS) ------------------------------------------------ NEW TOTAL COST ADDITIONAL FISCAL TOTAL PENSION OF PENSION PLUS COST,/(SAVINGS) YEAR COST PER GATES DEBT SERVICE TO GENERAL INCLUDING FOR $136 MILLION FUND NORMAL COST BOND ISSUE ------ 1991 ----w•------- $17,892,000 ------------- $21,778,000 ------------- $3,886,000 1992 19,501,000 29,635,000 10,134,000 1993 21,287,000 30,410,000 9,123,000 1994 23,054,000 31,218,000 8,164,000 1995 25,007,000 32,066,000 7,059,000 1996 27,153,000 32,957,000 50804,000 1997 29,884,000 33,893,000 4,009,000 1998 33,315,000 34,875,000 1,560,000 1999 33,191,000 35,906,000 2,7151000 2000 35,719,000 36,989,000 1,270,000 2001 38,468,000 38,126,000 —342,000 2002 41,346,000 39,320,000 —2,026,000 2003 44,360,000 40,573,000 —3,787,000 2004 47,619,000 41,886,486 —5,732,514 2005 51,030,000 43,268,139 —7,761,861 2006 54,704,000 44,721,275 —9,982,725 2007 58,549,000 46,243,870 —12,305,130 2008 47,575,000 47,843,660 268,660 2009 46,194,000 49,525,737 31331,737 2010 49,715,000 51,290,272 1,575,272 2011 531452,000 53,137,648 —314,352 2012 57,416,000 55,084,545 —2,331,455 ------------- TOTAL --------------- $856,431,000 --------------- --------------- $870,747,632 --------------- $14,316,632 ------------- 90"0141 90-0142 T'rt 1 0? FFfIil TY i_ic Hit"iIF !I. -TIT t1!11)ITS TO � t-ITY PERSION28-C ANALYSIS 3C: FISCAL YEAR r �aarra 1991 1992 1993 1994 1r)95 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TOTAL a a i. COMPARISON BETWEEN GATES UNFUNDED PAYMENTS AND $136 mrLLION GENERAL OBLIGATION BOND TO SATISFY GATES JUDGEMENT(WITH TAXABLE LEVEL DEBT SERVICE) ADDITIONAL $136 MILLION COST GATES COST ——.-----.__r_w.— BOND COST --_...——_-._.+. --- (SAVINGS) 15,400,000 9,215,000 -6,185,000 160,1000000 18*440,000 2,340,000 170000,000 18,440,000 1,440,000 17,800,000 18,440,000 640,000 18,7000000 18,440,000 -260,000 19,700,000 18,440,000 -11260,000 20,600,000 18,438,017 -2,161,983 21,700,000 18,437,683 -3,262,317 22,800,000 18,438,375 --4,361,625 23,900,000 18,437,650 -5,462,350 25,100,000 18,438,266 r6,661,734 26,300,000 18,438,155 -7#861,845 27,500,000 18,436,935 -9,063,065 29,000,000 18,438,438 -10,561,562 30, 500, 000 18, 438, 726 --12., 061, 274 32,000,OOO 180438,101 -13,561,899 33,600,000 18,4350399 -15,164,601 20,300,000 18,436,455 -1,863,545 16,40Or000 18,437,044 2,037,044 17,2001000 18,436,559 10 236,559 18,000,000 18,437,111 437,111 31500,000 18,439,038 14,939,038 473,1.00,000 396,416,952 -76,Ei83,048 TOT:-L Pact- F11: 1 -":,(1 THI_► 14:t16 =0 j 31 4 5 18 P.02 f { . _.. .. .... w PENSION28-D ANALYSIS 3D: TOTAL COST TO CITY IF A $136 MILLION GENERAL OBLIGATION BOND IS ISSUED TO SATISFY THE GATES JUDGEMENT (WITH TAXABLE LEVEL DEBT PAYMENTS) ---------------------------------------------- FISCAL TOTAL PENSION YEAR COST PER GATES INCLUDING NORMAL COST 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2001 2008 2009 2010 2011 2012 TOTAL ------------ $17,892,000 19,501,000 21,287,000 23,054,000 25,007,000 27,153,000 29,884,000 33,315,000 33,191,000 35,719,000 38,468,000 41,346,000 44,360,000 47,619,000 51,030,000 54,704,000 58,, 549, 000 47,575,000 46,194,000 49,715,000 53,452,000 57,416,000 $856,431,000 ------------ 31 NEW TOTAL COST OF PENSION PLUS DEBT SERVICE FOR $136 MILLION BOND ISSUE $23,873,000 33,830,000 340600,000 35,408,000 36,256,000 37,147,000 38,0810017 39,062,683 40,094,375 41,176,650 42,314,266 43,508,155 44,759,935 46,077,438 47,459,726 48,910,101 50,431,399 52,032,455 53,713,044 55,476,559 57,329,111 59,275,038 ADDITIONAL COST/(SAVINGS) TO GENERAL FUND $5,981,000 14,329,000 13,313,000 12,354,000 11,249*000 9,994,000 8,197,017 5,747,683 6,903,375 5;457,650 3,846,266 2,162,155 399,935 -1,541,562 -3,570,274 -5,793,899 -8,117,601 4,457,455 7,519,044 5,761,559 3,877,111 1,859,038 ------------- $960,815,952 $104,384,952 -----------------------_-_-- 90-0141 90--01,42 2 PENSION28-E ig ANALYSIS 3E: SAVINGS TO GENERAL FUND IF A $136 MILLION GENERAL OBLIGATION BOND IS ISSUED TO SATISFY THE GATES UNFUNDED JUDGEMENT (TAXABLE) -------------------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007. 2008 2009 2010 2011 2012 TOTAL TOTAL PENSION COST PER GATES INCLUDING NORMAL COST ..---------- $17,892,000 19,501,000 21,287,000 23,054,000 25,007,000 27,153,000 29,884,000 33,315,000 33,1910000 35,719,000 38,468,000 41,346,000 44,360,000 47,619,000 51,030,000 54,704,000 58,549,000 47,575,000 46,194,000 49,715,000 53,4520000 57,416,000 $856,431,000 ------------ 32 NEW PENSION COST IF $136 MILLION BOND ISSUED FOR UNFUND.LIAB. ------------- $14,658,000 15,390t000 16,160,000 16,968,000 17,816,000 18,707,000 19,643,000 20,625,000 21,656,000 22,739,000 23,876,000 25,070,000 26,323,000 27,639,000 29,021,000 30,472,000 31,996,000 33,596,000 35,276,000 37,040,000 38,892,000 40,836,000 $564,399,000 ------------ SAVINGS TO GENERAL FUND ------------- $3,234,000 4,111,000 5,1270000 6,086,000 7,191,000 8,4460000 10,241,000 12,690,000 11,535,000 12,980,000 14,592,000 16,276,000 18,037,000 19,980,000 22,009,000 24,232,000 26,553,000 13,979,000 10,918,000 12,675,000 14,560,000 16,580,000 $292,032,000 ------------ 90-0141 90-0142 w �4 PENSION40 ANALYSIS 4: SAVINGS TO GENERAL FUND IF A $126 MILLION SPECIAL OBLIGATION BOND IS ISSUED OVER A THREE YEAR PERIOD IN $42 MILLION INCREMENTS TO SATISFY THE GATES JUDGEMENT. -------------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002, 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TOTAL, TOTAL PENSION COST PER GATES I14CLUDING NORMAL COST (AT 8%) $15,400,000 16,138,000 17,415,000 19,593,000 21,991,000 24,501,000 27,507,000 310193,000 31,195,000 33,847,000 36,661,000 39,603,000 42,210,000 45,038,000 47,993,000 51,183,000 54,516,000 43,000,000 41,044,000 43,956,000 47,048,000 50,329,000 $781,361,000 ------------ NEW PENSION COST IF $126 MILLION BOND ISSUED FOR UNFUND. LIAR. $25,993,000 22*808,000 19,578,000 16,295,000 17,083,000 17,910,000 18,779,000 190691,000 20j649v000 21,654,000 22,710,000 23,819,000 24,983,000 26,205,000 27,4890000 28,837,000 30p252,000 31,737,000 33,297,000 34,935,000 36,655,000 38,461,000 $559,820,000 ------------ SAVINGS TO GENERAL FUND -10,5930000 -6,670,000 -2, 1631.000 3,298,000 4,908,000 61591,000 8,728,000 11,502,000 10,546,000 12,193,000 13,951,000 15,784,000 17,227,000 18,833,000 20,504,000 22,346,000 24,264,000 11,263,000 7,747,000 9,021,000 10,393,000 11,868,000 $221, 541,000 ------------ 90-0141 90-0142 33 G w ig PE14SION40-B ANALYSIS 4A:COMPARISON BETWEEN GATES UNFUNDED PAYMENTS AND $126 MILLION SPECIAL OBLIGATION BOND {WHICH IS ISSUED OVER A THREE YEAR PERIOD IN $42 MILLION INCREMENTS TO SATISFY THE GATES JUDGEMENT. ------------------------------------------- FISCAL YEAR 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 TOTAL GATES COST $15,400,000 16,100,000 17,000,000 17,800,000 18,700,000 19,700,000 20,600,000 21,700,000 22,800,000 23,900,000 25,100,000 26,300,000 27,500,000 29,000,000 30,500,000 32,000,000 33,600,000 20t3OO,000 16,400,000 17,200,000 18,000,000 3,500,000 $473,100,000 ------------ $126 MILLION BOND COST ------------- $2,865,000 8,817,000 15,180,866 18?440t630 l8,440,630 18,434,553 18,439,175 17,870,265 16,709,820 16,708,876 16,710,701 16,710,026 16,714,010 16,711,032 16,711,633 16,710,577 16,707,378 16,716,317 16,711,686 16,714,956 16,715,914 16,702,372 $352,443,417 ------------ ADDITIONAL COST (SAVINGS) ------------- -12,535,000 -7,283,000 -1, 819,134 640,630 -259,370 -1,265,447 -2,160,825 -3,829,735 -6,090,180 -7,191,124 -8,389,299 -9,589,974 --10, 785, 990 -12,288,968 -13,788,367 -15,289,423 -16,892,622 -3,583,683 311,686 -485,044 -1,284,086 13,202,372 ($120,656,583) -------------- 90--0141 34 90--0142 1-, w N PENSION40-A ANALYSIS 4B: TOTAL COST TO CITY IF A $126 MILLION SPECIAL OBLIGATION BOND IS ISSUED OVER A THREE YEAR PERIOD IN $42 MILLION INCREMENTS TO SATISFY THE GATES JUDGEMENT. ------------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 ?001 2002 2003 2004 200,5 2006 2007 2008 2009 2010 2011 2012 TOTAL TOTAL PENSION COST PER GATES INCLUDING NORMAL COST (AT 8%) w..-rJ.wr-rr rww $15,400,000 16,138,000 17,415,000 19,593,000 21,991,000 24,501,000 27,507,000 31, 193,000 31,195,000 33,847,000 361661,000 39,603,000 420210,000 45,038,000 47,993,000 51,1830000 54,516,000 43,000,000 41,044,000 43,956,000 47,048,000 50,329,000 $781,3610000 ------------ NEW TOTAL COST OF PENSION PLUS DEBT SERVICE FOR $126 MILLION BOND ISSUE r-wwwwu.wr-w-w $28,208,000 30,325,000 33,463,866 33,445,630 34,233,630 35,044,553 35,913,553 36,257,206 36,055,247 37,059,472 38,115,929 39,223,984 40,390,941 41,615,413 42,902,628 44,248,969 45,660,859 47,150,206 48,714,293 50,344,125 52,070,784 53,861,893 35 $884,306,181 ------------ ADDITIONAL COST (SAVINGS) ------------- $12,808,000 14,187,000 16, 048•, 866 13,852,630 12,242,630 10,543,553 8,406,553 5,064,206 4,860,247 3,212,472 1,454,929 T-379, 016 -1,819,059 -3,422,587 -5,090,372 -6,934,031 -8,855,141 4,150,206 7,670,293 6,388,125 5,022,784 3,532,893 $102,945,181 ------------ 9i41 90..0 42 I 5 r "ON PENSION40-C ANALYSIS 5: SAVINGS TO GENERAL FUND IF A $125 MILLION SPECIAL OBLIGATION BOND IS ISSUED OVER A `- FIVE YEAR PERIOD IN $25 MILLION INCREMENTS TO SATISFY THE GATES JUDGEMENT. ------------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TOTAL TOTAL PENSION COST PER GATES INCLUDING NORMAL COST (AT 8%) ------------- $15,400,000 16,138,000 17,415,000 19,593,000 21,991,000 24,501,000 27,507,000 31,193,000 31,195,000 33,847,000 36,661,000 39,603,000 42,210,000 45,038,000 47,993,000 51,183,000 54,516,000 43,000,000 41,044,000 43,956,000 47,048,000 50, 329,'000 $781,361,000 ------------ 36 NEW PENSION COST IF $125 MILLION BOND ISSUED FOR UNFUND.LIAB. ------------- $25,993,000 24,354,000 22,702,000 21,033,000 19,341,000 17,621,000 18,490,000 19,402,000 20,359,000 21,365,000 22,421,000 23,530,000 24,694,000 25,916,000 27,199,000 28,547,000' 29,962,000 31,448,000 33,008,000 34,646,000 36,366,000 38,172,000 $566,569,000 ------------ SAVINGS TO GENERAL FUND ------------- $10,593,000 8,216,000 5,287,000 1,440,000 -2,650,000 -6,880,000 -9,017,000 -11,791,000 -10,836,000 -12,482,000 -14,240,000 -16,073,000 -17,516,000 -19,122,000 -20,7941000 -22,636,000 -24,554,000 -11,552,000 -^81036, 000 --91310, 000 -10,682,000 -12,157,000 ($214,792,000) ------------- 90-0:141 90--0142 PENSION40-D � ANALYSIS 5A:COMPARISON BETWEEN GATES UNFUNDED PAYMENTS AND $125 MILLION SPECIAL OBLIGATION BOND WHICH IS ISSUED OVER A FIVE YEAR PERIOD IN $25 MILLION INCREMENTS TO SATISFY THE GATES .JUDGEMENT. FISCAL YEAR 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 TOTAL GATES COST $15,400,000 16,100,000 17,000,000 17,800,000 18,700,000 19,700,000 20,600,000 21,700,000 22,800,000 23,900,000 25,100,000 26,300,000 27,500,000 29,000,000 30,500,000 32,000,000 33,600,000 20,300,000 16,400,000 17,200,000 18,000,000 3,500,000 $473,100,000 -------------- $125 MILLION BOND COST ------------- $1,330,000 4,165,937 7,207,996 10,317,359 13,502,388 15,103,137 15,102,142 15,103,160 15,105,926 15,101,397 15,101,826 15,100,053 15,104,420 15,110,775 15,104,810 15,107,628 15,105,417 15,108,861 15,107,207 15,101,782 15,112,951 15,098,177 $293,303,349 -------------- ADDITIONAL COST (SAVINGS) ------------- ($14,070,000) -11,934,063 --9, 792, 004 -7,482,641 -5,197,612 -4,596,863 -5,497,858 -6,596,840 -7,694,074 -8,798,603 -9,998,174 -11,199,947 -12,395,580 -13,889,225 -15,395,190 -16,892,372 -18,494,583 -5,191,139 -1,292,793 -2,098,218 -2,687,049 11,598,177 ($179,796,651) -------------- 90-0141 37 90-0142 AM, PENSION40-E � rash ANALYSIS 5B: TOTAL COST TO CITY IF A $125 MILLION SPECIAL OBLIGATION BOND IS ISSUED OVER A FIVE YEAR PERIOD IN $25 MILLION INCREMENTS TO SATISFY THE GATES JUDGEMENT. ------------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006' 2007 2008 2009 2010 2011 2012 TOTAL TOTAL PENSION COST PER GATES INCLUDING NORMAL COST (AT 8%) ------------- $15,400,000 16,138,000 17,415,000 19,593,000 21,991,000 24,501,000 27,507,000 31,193,000 31,195,000 33,847,000 36,661,000 39,603,000 42,210,000 45,038,000 47,993,000 51,183,000 54,516,000 43,000,000 41,044,000 43,956,000 47,048,000 50,329,000 $781,361,000 ------------ NEW TOTAL COST OF PENSION PLUS DEBT SERVICE FOR $125 MILLION BOND ISSUE ------------- $27,323,000 28,519,937 29,909,996 31,350,359 32,843,388 32,724,137 33,592,142 34,505,160 35,464,926 36►466,397 37,522,826 38,630,053 39,798,420 41,026,775 42,303,810 43,654,628 45,067,417 46,556,861 48,115,207 49,747,782 51,478,951 53,270,177 39 $859,872,349 ------------ ADDITIONAL COST (SAVINGS) ------------ $11,923,000 12,381,937 12,494,996 11,757,359 10,852,388 8,223,137 6,085,142 3,312,160 4,269,926 2,619,397 861,826 —972, 94s7 —2,411,580 —4,011,225 —51689,190 —7,528,372 —9,448,583 3,556,861 7,071,207 5,791,782 4,430,951 2,941,177 $78,511,349 ------------- 90- 0142 _} PEN SION28-H ' -e ANALYSIS 7: COMPARISON BETWEEN $136 MILLION BOND ISSUE A AND $226 MILLION BOND ISSUE TO SATISFY THE GATES JUDGEMENT (TAXABLE/LEVEL) ------------------------------------------------- 7 $226 MILLION FISCAL BOND COST YEAR (TAXABLE/LEVEL) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TOTAL 28,769,475 28,771,175 28,771,375 28,772,375 28,771,025 28,774,175 28,772,775 28,769,512 28,769,825 28,772,375 28,770,337 28,771,888 28,773,738 28,772,113 28,772,750 28,769,925 28,772,425 28,772,088 28,770,262 28,771,837 28,769,750 28,770,963 -------------- 632,972,163 -------------- $136 MILLION BOND COST (TAXABLE/LEVEL) 7,120,000 14,245,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,247,486 14,247,139 14,249,275 14,247,870 14,247,660 14,249,737 14,250,272 14,245,648 14,248,545 ADDITIONAL COST (SAVINGS) ($21,649,475) -14,526,175 -14,521,375 -14,522,375 -14,521,025 -14,524,175 -14,522,775 -14,519,512 -14,519,825 -14,522,375 -14,520,337 -14,521,888 -14,523,738 -14,524,627 -14,525,611 -14,520,650 -14,524,555 -14,524,428 -14,520,525 -14,521,565 -14,524,102 -14,522,418 --------------------------- 306,348,632 ($326,623,531) --------------------------- =J _r s 90-0141 39 J0-0142 PENSION28-I va I ANALYSIS 7At COMPARISON BETWEEN $136 MILLION BOND ISSUE (TAXABLE/LEVEL) AND $226 MILLION BOND ISSUE (TAX EXEMPT/LEVEL) TO SATISFY THE GATES JUDGEMENT FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TOTAL $226 MILLION BOND COST (TAX EXEMPT / LEVEL) $23,003,774 23,006,374 23,004,734 23,003,934 23,004,384 23,003,484 23,003,543 23,006,464 23,003,714 23,001,974 23,002,148 23,004,669 23,004,469 23,006,319 23,006,025 23,003,031 23,003,062 23,006,131 23,001,894 23,005,362 23,005,125 23,005,125 $506,095,739 -------------- $136 MILLION BOND COST (TAXABLE/LEVEL) ------------ $7,120,000 14,245,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,247,486 14,247,139 14,249,275 14,247,870 14,247,660 14,249,737 14,250,272 14,245,648 14,248,545 40 $306,348,632 ------------ ADDITIONAL COST (SAVINGS) ------------- ($15,883,774) -8,761,374 -8,794,734 -8,753,934 -8,754,384 -8,753,484 -8,753,543 -8,756,464 -8,753,714 -8,751,974 -8,752,148 -8,754,669 -8,754,469 -8,758,833 -8,758,886 -8,753,756 -8,755,192 -8,758,471 -8,752,157 -8,755,090 -8,759,477 --8, 756, 580 ($199,747,107) ------------- 90- O JL41 90 -OJL42 „,emitted into the public PENSION28—G ANALYSIS 7B: COMPARISON BETWEEN $136 MILLION BOND ISSUE AND $226 MILLION BOND ISSUE TO SATISFY THE GATES JUDGEMENT (TAX—EXEMPT) ------------------------------------------ FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008' 2009 2010 2011 2012 sGyTi�� $226 MILLION BOND COST (TAX EXEMPT / LEVEL) $23,003,774 23,006,374 23,004,734 23,003,934 23,004,384 23,003,484 23,003,543 23,006,464 23,003,714 23,001,974 23,002,148 23,004,669 23,004,469 23,006,319 23,006,025 23,003,031 23,003,062 23,006,131 23,001,894 23,005,362 23,005,125 23,005,125 $506,095,739 -------------- 41 $136 MILLION BOND COST (TAX EXEMPT / LEVEL) ------------ 7,120,000 14,245,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,247,486 14,247,139 14,249,275 14,247,870 14,247,660 14,249,737 14,250,272 14,245,648 14,248,545 $306,348,632 -------------- ADDITIONAL COST (SAVINGS) ------------- ($15,883,774) —8,761,374 —8,754,734 —8,753,934 —8,754,384 —8,753,484 —8,753,543 —8,756,464 —8,753,714 —8,751,974 —8,752,148 —8,754,669 —8,754,469 —8,758,833 —8,758,886 —8,753,756 —8,755,192 —8,758,471 —8,752,157 —8,755,090 —8,759,477 —8,756,580 ($199,747,107) ------------- 90--014l 90 -0142 iritn the DuLlic PENSION28-F o. ANALYSIS 7C: COMPARISON BETWEEN $136 MILLION BOND ISSUE (TAXABLE/LEVEL) AND $226 MILLION BOND ISSUE (TAX EXEMPT/NO MILLAGE INCREASE) TO SATISFY THE GATES JUDGEMENT ----------------------------------------------- FISCAL YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TOTAL $226 MILLION BOND COST (TAX EXEMPT / NO MILLAGE INC.) ------------- 19,460,000 19,460,000 19,460,000 19,460,000 20,155,000 20,795,000 22,355,000 23,870,000 25,235,000 25,375,000 25,980,000 26,205,000 28,712,087 29,803,658 32,140,452 34,019,855 35,347,184 35,574,700 35,649,330 36,498,067 37,294,440 572,849,773 42 $136 MILLION BOND COST ('TAXABLE/LEVEL) ------------ 7,120,000 14,245,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,250,000 14,247,486 14,247,139 14,249,275 14,247,870 14,247,660 14,249,737 14,250,272 14,245,648 14,248,545 306,340,632 -------------- ADDITIONAL COST (SAVINGS) ------------- $7,120,000 -5,215,000 -5,210,000 -5,210,000 -5,210,000 -51905,000 -6,545,000 -8,105,000 -9,620,000 -10,985,000 -11,125,000 -11,730,000 -11,955,000 -14, 464, 601 -15,556,519 -17,891,177 -19,771,985 -21,099,524 -21,324,963 -21,399,058 -22,252,419 -23,045,895 ($266,501,141) ------------- 90-0141 90--OJL42 Submitted into theJ public record connecfinn with t � MEMORANDUM item sari - i I �._ g— . Matt y Hirai City Clerk TO: MAYOR AND MEMBERS OF THE MIAMI CITY COMMISSION FROM: AFSCME LOCAL 1907, SANITATION EMPLOYEES ASSOCIATION, FRATERNAL ORDER OF POLICE, MIAMI LODGE 20 AND PROFESSIONAL FIREFIGHTERS OF MIAMI, LOCAL 587 IAFF RE: BOND ISSUE FOR PENSION DEBT BATE: FEBRUARY 131 1990 INTRODUCTION The Miami City Commission has been asked to consider authorizing the sale of bonds for the purpose of retiring the unfunded liability and other elements of the judgment levied against the City in the case of Gates, et al. v. City of Miami.. For the reasons which follow the collective bargaining representatives of your employees recommend the issuance of such bonds. HISTORY In 1985 the City and the plaintiffs in the Gates case reached a settlement after nearly one year of negotiations to resolve all outstanding issues in that litigation. The lawsuit arose in the mid-70's over the misapplication of pension monies which resulted in the creation of excess pension debt, posing a threat to the actuarial security of the Pension Fund. Through various court proceedings the City was found to have improperly used pension monies and a trial on the damages issue was scheduled. In the interim, the then City Commission attempted to eliminate the lawsuit by abolishing the Pension Boards which by this time were supporting the plaintiffs. The unions intervened on behalf of the plaintiff employees and Pension Boards and the City ordinance purporting to abolish the Boards of Trustees was declared unconstitutional and held invalid. Thereafter negotiations were commenced to avoid the trial on damages and a resolution was reached in the spring of 1985. The current pension ordinance and the judgment of the court establishing the payment schedule for the unfunded liability and normal pension costs are the results of that lengthy series of negotiation sessions. The City currently is five years into the payment of the debt established by the Gates case and the annual payments are rising. At the time the damages issue was being settled, the unions recommended level funding of the debt. The then City' Manager, Randall Rosencranz, instead recommended to the Commission what in effect was an adjustable mortgage with rising rates. The initial hl L57 -1 v N -S WOr-7-�V141 90-014 2 0 1 MEMORANDUM Submitted into the public record connection with item._,_,1—on 2 1 N silqo_ . TO: MAYOR AND MEMBERS OF THE MIAMI CITY Nutty Hirai City Clerk COMMISSION FROM: AFSCME LOCAL 1907, SANITATION EMPLOYEES ASSOCIATION, FRATERNAL ORDER OF POLICE, MIAMI LODGE 20 AND PROFESSIONAL FIREFIGHTERS OF MIAMI, LOCAL 587 IAFF RE: BOND ISSUE FOR PENSION DEBT DATE: FEBRUARY 13, 1990 INTRODUCTION The Miami City Commission has been asked to consider authorizing the sale of bonds for the purpose of retiring the unfunded liability and other elements of the judgment levied against the City in the case of Gates, et al. v. City of Miami. For the reasons which follow the collective bargaining representatives of your employees recommend the issuance of such bonds. xzBTORY In 1985 the City and the plaintiffs in the Gates case reached a settlement after nearly one year of negotiations to resolve all outstanding issues in that litigation. The lawsuit arose in the mid-70's over the misapplication of pension monies which resulted in the creation of excess pension debt posing a threat to the actuarial security of the Pension Fund., Through various court proceedings the City was found to have improperly used pension monies and a trial on the damages issue was scheduled. In the interim, the then City Commission attempted to eliminate the lawsuit by abolishing the Pension Boards which by this time were supporting the plaintiffs. The unions intervened on behalf of the plaintiff employees and Pension Boards and the City ordinance purporting to abolish the Boards of Trustees was declared unconstitutional and held invalid. Thereafter negotiations were commenced to avoid the trial on damages and a resolution was reached in the spring of 1985. The current pension ordinance and the judgment of the court establishing the payment schedule for the unfunded liability and normal pension costs are the results of that lengthy series of negotiation sessions. The City currently is five years into the payment of the debt established by the Gates case and the annual payments are rising. At the time the damages issue was being settled, the unions recommended level funding of the debt. The then City' Manager, Randall Rosencranz, instead recommended to the Commission what in effect was an adjustable mortgage with rising rates. The initial LALw>TcoN.5 IL41 90-OJL42 payments were low but were to culminate toward the end of the debt with some rather substantial payments including the last payment, which will exceed $30 million. While many counsel against putting off this substantial debt into the future without regard to the available sources of funding, this method was adopted by the Commission. The payment schedule was also incorporated into the court judgment and remains an enforceable court order. As was predicted, the escalating costs of the debt (5% each succeeding year) are approaching unmanageable levels and will soon adversely impact the City's ability to fairly compensate its work force, meet the physical needs of the City in providing basic public services, and ultimately adversely affect the City's debt rating. The settlement of the Gates case in 1985 substantially improved the City's rating with various bond analysis services. This rapidly escalating debt as a part of the overall City budget, however, will undoubtedly have a negative effect unless addressed. Some three years ago, discussions began as an outgrowth of pension -benefit negotiations between the unions and the City that a bond issue be approved for the purposes of retiring the Gates debt and preventing its future adverse impact on the City fiscal health. PURPOSE OF -THE BOND ISSUE The purpose of the bond issue is simple. Through the issuance of the bonds the entire pension debt may be paid now, thereby sparing -_ the City some $60 million in interest payments. Even with the added millage cost for the retirement of the bonds, the City will still enjoy substantial financial savings. Moreover, it will alleviate immediately a $15 million drain on monies raised through ad,valorem taxation, which is limited by a 10 mil cap. The City is currently stretching what are already overburdened economic resources in order to maintain a level of services that in fact needs to be increased. There is an increasing demand for public -safety services which cannot be met unless additional dollars are made available to the budget. Similarly, there is a growing need for community services in the areas of park maintenance, recreation, and social services for children, the handicapped, and the elderly. Without the additional monies to maintain the personnel and facilities needed to accomplish these goals, the taxpayers will be deprived of these much -needed city services. - The maintenance of basic employee costs has also increased. While the unions have substantially moderated their salary demands over previous years, there is an increase in cost in employee health care, which has proven much more difficult to address than the question of salary increases. The $60 million savings to be Submitted into the public record in connection with item.___L_--_- on � s�go 90- 0142 Matty Hirai City Clerk \ realized from the advance payment of the Gates debt will enable the City to meet the increase in demand for services to the public by keeping a properly staffed and trained work force. ,METHODOLOGY FOR THIS130ND ISSUE The key question is whether or not this bond issue would require a referendum of the electors. We concur with the city's outside legal counsel that a referendum is not required. The City Charter already provides for the use of ad valorem taxation monies to fund pension costs. The bond issue in the present case in essence merely refinances an existing debt which is already approved by state law and charter. To refinance new debts, particularly where it results in lower cost to the taxpayer, has not ever and does not now require a referendum. The litigation which led to the current financial situation is complex and difficult to explain. Preparation of the notice to the members of the class during the lawsuit took weeks and still generated complaints from individuals who simply said they could not understand its meaning. An effort to attempt to explain this to the electors in a brief but meaningful manner would be equally difficult. We do recommend, however, that the purpose of the bond be validated through a circuit court and ultimately a supreme court validation proceeding. The unions would be willing to offer the assistance of their legal counsel to intervene in those proceedings on behalf of the City and to support the legality of the bond validation. CONCLUSION The difficulties which led. to the Gates litigation and ultimately the judgment which faces this City Commission resulted from the breach of fiduciary responsibility by prior City Commissions. There was a failure to properly safeguard the pension system and there was a failure that once made aware of the problem, the Commission failed to promptly correct it. The result has been costly. This Commission, however, has an opportunity to spare the taxpayers of this City $60 million in future payments by acting now through the' issuance of these bonds. It will also have the opportunity create an immediate and substantial relief on the current budget -year allocations and future budget -year allocations, thereby permitting the maintenance of a proper level of public service. As a result your employees strongly recommend the issuance of the Sutnd.n xnt© i ova�L for a bond validation proceeding. miderecord in connection with 3 9(}-_-- JVOIL41 item on A, l !rl q& . Matty Hirai ����� City Clerk