2007-04-14 Minutes of the City Council Retreat Meeting of La Porte City Council

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City Council Retreat Meeting — April 14, 2007 - Page 2 Sales tax trends — Historical Growth — 10 years. Municipal Court Revenues General Fund Working Capital (referred to savings account reserves) do not want to go below 90 day line Recap of Council Reserve money — Balance $38,084 — money can be used as needed by council. Assumptions — Revenues Assumptions — Expenditures Maintenance may need to increase for gas/electricity. Average 3% increase for City of La Porte Employees. OPEB — Funding GASB — 45 — It is estimated the City will need to budget $2.5 Million to cover employee benefits included in the requirements of GASB-45. Sick Buy Back — It is estimated it will cost $220,000.00 per year. Compensation Study — rough estimate of cost to implement would be - $300,000.00 Projected Revenues/Expenditures for 10 Years Estimates Only Beginning in 2008 the City must account for GASB. Mr. Dolby reported the City will need to do an actuarial study later this summer. The study will provide a more accurate estimate of the anticipated costs to implement GASB-45. The cost of the actuarial study will be $8000.00. The actuarial study will be done through an Interlocal Agreement with North Texas Council of Governments. Mr. Dolby explained Options Defined Benefits or Defined Contributions — Defined benefits is the current system the City utilizes. Defined contributions pays so much per year to retirees for health insurance coverage. A Bond issue could be done to cover the financial obligations of OPEB. Council requested numbers without GASB and stated we must establish Trust for Benefits. The Water/Sewer Rate Model was discussed. Assumptions: Waste Water Treatment Plant upgrade may cause sewer rate increase to 11.50. 4. BREAK Council retired for a short break at 9:40 a.m. Council returned at 9:45 a.m. 5. FISCAL YEAR 06-07 UPDATES/ ISSUES Interim Finance Director Michael Dolby provided an overview of GASB 45.